Relationship Marketing and Its Impact in Nigeria: Study of the Money Deposit Banking Sector

Relationship Marketing and Its Impact in Nigeria:Study of the Money Deposit Banking Sector

1OKO, A. E. NDU

&

2kalu S. E

1Department of Marketing, Abia State University, Uturu-Nigeria 2Faculty of Management Sciences, University of Port Harcourt, Rivers State-

Nigeria

Corresponding Author: OKO, A. E. NDU, Department of Marketing, Abia StateUniversity, Uturu, Nigeria

Tel: +2348057851630, +2348064868940E-mail: [email protected]

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Abstract:Employees of the money deposit banking sector of Nigeria express dis-satisfaction based on employer-employee relationships thus grievances rateis high as well as rate of labour turnover. These impact negatively on theability of these firms at customer satisfaction, thus profit reportedperiodically rather than base on consumer satisfaction is based on highservice charges and cost of capital in exchange relationship. This worktherefore studied for challenges to the adoption of relationship marketingprinciples in the banking sector of Nigeria, based on the adoption of thequestionnaire method of data collection, hypotheses, spearman’s rankcorrelation co-efficient, and Pearson’s correlation co-efficient amongothers as date analysis tools. Findings among others include thatmanagement of these firms operate base on the task performance philosophyas against a balance between task and maintenance philosophies; operationsare not internal marketing oriented and relationship marketing principlesare not internalized in the employees as they are compelled to behaverelationship marketing. It is believed that activities aimed to spurringintra industrial competition in this industry will spur up the adoption ofrelationship marketing principles

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Keywords: Management philosophies, internal marketing, customerexploitation, ICT, Interactive marketing, bank density and moneydeposit banks.

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1.1 Introduction:Relationship marketing practice in the developed economies is challenged bythe growth and development in information communication technology, withits attendant results as mass customization and reduction in the number ofone-on-one relationships firms seek to maintain with customers-Berkowitz,Kerin, Hartley and Rudelius (2000) and Keith (1960), hence the role ofmarketing intermediaries is greatly relegated to the background. Hither-to,personal and tender-loving-care connections that existed between thevendors and (customers) consumer are obviously absent.

Statistics on Nigeria as a developing nation show that more than 50% of thecitizens live below the poverty line-BBC News (2007), World DevelopmentReport (2010) and National Bureau of Statistics; 70% of the country’spopulation dwell in the rural areas-Nkanga (2007) and 85% of the 60 millionadults in the country under the age of 35 can neither read nor write –Onah(2007). Based on these reports, the questions is “Are Nigerians ready toembrace information communication technology for marketing dis-intermediation? If not, how are Nigerian firms especially in the MoneyDeposit Banking Sector adapting to and or adopting the relationshipmarketing principles.

1.2 Theoretical Frame Work:Developed societies, inspite of the high rate of growth and development ininformation communication and technology still depend on relationshipmarketing as a key goal of marketing with its ability at developing deepand enduring relationships with people and organizations, for direct andindirect impacts on corporate goals and marketing objectives actualization–Kotler and Keller (2009). Relationship marketing aims at building mutuallysatisfying long term relationships with key constituents of an organizationin order to earn and retain their businesses-Gummesson (1999), Mckenna(1991) and Christopher, Payne & Ballentyne (1991).

Unlike these advanced nations, Nigeria is characterized thus: Research results show that Nigeria consumers are up and coming and

believe in technology for carrier advancement thus are techno-strivers-Kotler and Armstrong (2006) but over 90% of these consumersare rural dwellers and are traditionalists who are suspicious abouttechnology –Oko(2013).

Common features of Nigeria marketing systems are supermarkets,departmental stores, mobile shops and automatic vending machinebased. This is however dominated by open market stalls, streettrading and hawking oriented businesses –Ibe (1993) and Oko (2013).

Traditional marketing system in Nigeria, based on its intermediatingphilosophies ensures as well as enhances loyalty and creates value inexchange relationship –Kotler and Armstrong (2006), thus isconsidered a virtue for relationship marketing.

Nigeria is under banked by virtue of the low density of bank branches–Ike (1985), especially as bank density is recorded at 1:30,432-www.eco/bacons.it.com/component/simpledownload

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The question thus is; given the characteristics of Nigeria markets comparedto developed economies, and the relative good quality for the practice ofrelationship marketing, why are Nigerian business outfits especially in themoney deposit banking sector averse to the principles of relationshipmarketing?

1.3 Objectives of the Study:This work has the objective of re-positioning firms in the money depositbanking sector of Nigeria for efficiency based on the adoption ofrelationship marketing principles.

This is based on the achievement of subsidiary objectives of: Determining the level of adoption (acceptance for application) of the

practice of relationship marketing in the banking sector; Ascertaining the challenges to the adoption of the principles of

relationship marketing; Ascertaining the ability of firms at measuring the benefits

(advantages) associated with the adoption of relationship marketingprinciples;

Ascertaining the extent to which the availability of the technologyof information communication or otherwise aids the practice ofrelationship marketing; and

To determine the degree of relevance of internal marketing inrelationship marketing as practiced in the money deposit sector ofNigeria.

1.4 Significance of the Study:Relationship marketing is in vogue in most developed and some developingeconomies of the globe with managers of businesses involved in task –oriented activities and behaviours of planning, scheduling, co-ordinating,provision of resources and setting performance goals-Likert (1967), basedon relationship oriented behaviour that demonstrate trust and confidence,acts of friendliness and considerate kindness and care, showingappreciation, keeping people informed among others-Bateman & Snell (1999).These performance and maintenance leadership styles and tasks that havetheir anchor on relationship marketing generate satisfied employees, fewergrievances and less labour turnover in work units –Fleishonan & Harris(1962), hence external customer satisfaction rate is high.

Preliminary survey work on the management of firms in the money depositbanking sector of Nigeria shows that managers are more task performanceoriented in behavior, thus employees grievance rate is high as well as therate of labour turnover, consequently external customers’ satisfaction rateis considered low.

This work thus is significant as it is focused at guiding managers of firmsin the Nigeria banking sector towards a combination of performance-orientedbehaviour (concern for production) and maintenance –oriented behaviour(concern for people) based on the principles of relationship marketing; forenhanced external customer satisfaction and corporate profitability.

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1.5 Hypotheses:Analyses of this study are predicted on the following null hypotheses

H1: The rate of adoption of relationship marketing principlesis insignificantly low in the banking sector of Nigeria

H2: Improper combination of performance and maintenancebehaviour in the management of money deposit banks inNigeria does not significantly challenge the adoption ofrelationship marketing principles

H3: Benefits of relationship marketing practices are notsignificantly maximized by firms involved compared tonon-adoption of the principles

H4: Inability to maximized the role of technology ofinformation communication does not significantly affectthe adoption of the practice of relationship marketing

H5: Efficiency in internal marketing management does notcontribute significantly to relationship marketingefficiency.

1.6 Methodology:The scope of this research is the money deposit banking sector of Nigeria;made up of 25 money deposit banks that trade on the floor of the Nigeriastock exchange market – The Guardian (January 14, 2014), drawn from the sixgeo-political zones of Nigeria, selected employees both on regular andcontract bases and selected artificial and natural persons as externalcustomers. The entire 25 banks are considered both the population andsample because on the smallness of the (number of firms in) size of firmsin the industry.

Sets of questionnaires which were administered on top members of staff(managers as representatives) of the banks yielded 68% return and 62%validity rate, while those administered on the regular and contractpersonnel, artificial persons and natural person customers yielded 70%, 66%and 64% return rates and 65%, 63% and 61% validity rates respectively.

Mode of employment, employee emoluments, promotion, discipline andcessation programmes as personnel related issues were compared to thecontents of employee job description and specification. Performancestandard setting procedures were also evaluated in line with the provisionsof the principles of management by objectives, total quality management andopen-book management system respectively. The work also evaluated forrelevance, the role of and management attitude to quality circleactivities.

Activities at the different customer touch points in banking were evaluatedand adopted as basis for evaluating customers’ satisfaction with banksservices rendition with respect to the quality of services, price paid forservices, employees treatment to customers, after sales services, range ofservices, handling of complaints and enquiries, bank employees knowledge

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and extra extended service components of bank services in terms ofemployees’ friendliness, ability and willingness to show understanding andempathy to customers, fairness to customers; degree of control customersimpact on the way things turn out in the banks, availability of options andalternatives as solution to customers problems and willingness and abilityto provide customers with educative information on available bank(products) services, policies and procedures in their dealings with thebanks.

The Likert rank order scale measurement was introduced to aid the analysesof the set of questionnaires as it aided respondents assign value to theirratings of variables that influence, especially the customers’ assessmentof bank service-efficiency and bank personnel disposition as extra-extendedservice components and bank personnel assessment of management.

The relationship between the banks and other stakeholders as marketingpartners (dealers and agents) and members of the financial community ofshareholders, investors and analysts were also evaluated –Kotler and Keller(2009).

The‘t’ test statistics for difference or similarity of means was adopted inthe assessment of the banks by customers and employees as well as otherstakeholders while hypotheses testing was based on spearman’s rankcorrelation co-efficient and pearson correlation co-efficient R students‘t’ statistics for differences of mean, and analysis of variancerespectively.

2.1 Literature:Globally, especially based on the development in information communicationtechnology, and its accelerated and acyclic impacts on inter and intraindustrial competition, different organizations in different sectors of thedeveloped and developing economies are endeavouring at developing andsustaining enduring relationships with their internal and external publicsespecially in the four key constituents of the defined targets ofcustomers, employees; marketing intermediaries and providers of ancillaryservices and members of the financial community, for explicit and implicitbenefits considered vital for corporate goal actualization.

The desire to maximize the benefits of these relationships requires thestudy of the needs and characteristics of these identified and definedpublics as well as their resources base, capacities, goals and theadjustments of corporate policies and strategies for the satisfaction ofcustomer identified needs as basis for the demand and command of theimplicit and explicit benefits as returns on investments.

This relationship commonly referred to as relationship marketing yieldsunique corporate asset referred to as marketing network-Kotler and Keller(2009), sustained by the operating principle of ‘building an effectivenetwork of the relationships with key stakeholders and profit will follow-Anderson, Harkansson & Johnson (1994).

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Relationship Marketing has its thrust as attracting and retaining customersfor loyalty through customer satisfaction and delight, based of estimationof customer life time value and designing of market offer for favourablecost benefit (revenue) returns over the customers’ life time, given goodquality customer relationship management and partner relationshipmanagement exercises. Acceptable relationship marketing programmes thusmust balance the needs of the internal and external customers at profit tothe business unit. This work determines the possibility of balancinginternal and external customers’ needs to the banking industry of Nigeria.

2.2 Thrust Issue of Relationship Marketing:The thrust issues of relationship marketing are the satisfaction andretention of customers for long time customers’ life span at profit to theproviders of the market offer. This relationship is anchored onsustainability of knowledge of the customers; service and contact, andprofit. Organizations that strive for these triple bottom line indices ofrelationship marketing on sustainability basis achieve competitiveadvantage, especially with focus of production efficiency, marketingintermediary and ancillary services suppliers’ management skills andattractiveness to employees-Muzunade & Slade (2010). Hence, firms in allplanning activities must recognize the core variables in the sustainabilityof relationship marketing, acquire professional skills that must integratethe variables for sustainability in relationship marketing at leastpossible cost to the organization and be willing and able to sustain themomentum of relationship marketing based on continuous improvement throughsystematic measurement, audit and knowledge management of changes in taste,demography and social –economic variables of the consumers. This is becausethe frame work of sustainable relationship marketing management is afunction of efficiency in the evaluation of changes in customercharacteristics based on compliance audit, best practices and servicesrendition that are above the stated benchmarks. It is therefore importantto know if banks in Nigeria are interested and or are involved in customerevaluation as well as customer satisfaction evaluation.

2.3 Customer Satisfaction:Providing customer satisfaction as the goal of marketing yieldsprofitability as objective; hence marketers must produce satisfiedcustomers to be successful in the long run. Given this, organizations gaincompetitive advantages as they strive to create committed (loyal) customersthrough customer delight, as a step beyond satisfaction. Customerrelationship management is based on customer value and customersatisfaction as building blocks, thus profitable customer relationships areaimed at delivering superior customer value and satisfaction –Kotler &Keller (2010). Customer satisfaction is a function of the product’s(service’s) perceived performance relative to the customers’ expectations.Relationship marketing thus relies upon the communication and acquisitionof consumer requirements from existing customers in a mutually beneficialexchange relationship permitted by the customer through an “option” system-Gala & Chapaman (1994), thus it is integrated into the buyer’s decisionprocess for need recognition, information search, evaluation ofalternatives, decision to or not to buy, and post purchase behaviour

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management. Based on the above, marketers in relationship marketing offercustomers service that excess their expectations for the generation in thecustomers, a sense of satisfaction and or the creation of feelings ofgoodwill towards the service providers. This created delight encouragescustomers to develop positive perceptions and to return (creating customerloyalty),-businesscasestudy.co.uk/…customer-service/the-customer-service.conce, for enhanced loyalty.

Customers develop trust and confidence in the product based on the qualityof the core, augments and extended product characteristics. Hence inaddition to core issue of product function, marketers in relationshipmarketing management emphasis the quality of the products (goods andservices); the price; employees treatment of customers; after salesservices; range of products, customer complaints/enquire management andknowledgeablity of personnel-as characteristics of the augment, and abilityof employees at satisfying the implicit customers needs in the offer, asfriendliness (associated with being accepted politely and courteously),understanding and empathy (that involves customers’ need to feel that theservice provider understand and appreciates their circumstances andfeelings without criticisms or judgement); fairness (the need to be treatedfairly in all transactions); control (represented by customers’ need tofeel really or apparently, that they have control in the service providers’decisions concerning their welfare), options and alternatives (showingcustomers’ need to feel and be assured of the existence of other avenues orsolutions to the situations at hand) and information (desire to be educatedand be informed on and about the product characteristics, managementpolicies as well as corporate procedures to be adopted in dealings with theservice providers)-businesscasestudy.co.uk…customer-service/the-customer-service-conce. Corporate ability and efficiency in the satisfaction ofcustomers in the core, augmental and extended features of the market offergenerates customer loyalty and retention as well enhances profitability-Andrson, Fornell & Lehmann (1994).

2.4 Customer Relation:Relationship marketing management principles and strategies achieve greaterthan customer satisfaction. They in addition create customer delight,causing customers to remain loyal and favourably disposed to be involved inword of mouth communication concerning the organization and its offer-Johnson, Zinkham &Ayala (1998). Loyal customers are committed to theproduct (service) and to the firm, resulting mostly from the manner inwhich the firm responds to customers’ complaints or problems.

Research results show that loyal and committed customers do not requireadditional product promotion as information for decision to buy, they areresistant to competitors’ marketing efforts and are more receptive to lineextensions and other new products offered by the same firm and are morelikely to forgive occasional product or service failures by the firm. –Deighton Henderson & Neslin (1994) and Bejou & Palmer (1998).

Given this discourse, authorities in marketing consider relationshipmarketing a key to customer loyalty and retention, based on various

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practices that ensure repeated trade from pre-exiting customers bysatisfying requirements above those of competing firms through mutuallybeneficial relationship-Gale & Chapman (1994) and Gord on (1999). Formaximization of profit and counteracting the “Leaky bucket theory ofbusiness” where gained new customers in older direct marketing orientedbusinesses are at the trade off or coincide with the loss of oldercustomers, relationship marketing as a technique is adopted as means ofcounter balancing these new customers and opportunities with current andexisting ones-Kotler & Armstrong (2010) and Saunders & Wong (1999).

Relationship marketing principles and strategies are favourably deployed incorporate churn management, especially as churn rate reduction hassignificant impact on profitability, even where the retained customers areprimarily repeat purchasers. Reducing the number of customers who leave afirm per period increases the average “life” of the firm’s customer base-Hawkins, Best &Coney (2001) and Li (1995).

Customers’ retention is profitable because the longer the customers areretained by a firm, the more profits the firm derives from the customers,hence a stable customer base yields higher profitability per customer. Thusreducing the number of customer who leaves the firm based on relationshipmarketing techniques each year by 5% (ie increasing customer retention) hasthe ability of increasing corporate profitability for between 25 and 85percent depending on the characteristics of the industry-Rerchheld & Sasser(1990). This increase is however in terms of net presentvalue-http://en.wikipedie.org/wiki/relationship-marketing .retrieved25/5/2013.

The claim of Rerchheld & Sasser (1990), on profitability of retainedcustomers is validated by Flaming & Asplund (1991), whose research resultshows that engaged customers generate 1.7 times more revenue than normalcustomers, while combined engaged employees and customers yield revenuereturns of 3.4. These claims of Relchheld & Sasser (1990) and Fleming&Asplund (1991), on the potency of retained customers is challenged byCarrol & Reichheld (1992), who dispute the accuracy of these calculations,claiming they result from faulty cross sectional analyses.

It is worthy of note that the claimed potency of retained customers onprofitability enhancement is given a boost by Buchanan & Gilles (1990) asreported in http://en.wikipedia.org/wiki/relationship-marketing. Buchanan &Gilles (1990) record that the increase in profitability associated withcustomer retention efforts occurs given the adoption of relationshipmarketing and its impacts on exchange and transaction relationships overthe life span of the customers are as a result of the following:

The cost of acquisition of customers occurs only at the beginning ofa relationship, so the longer the relationship, the lower theamortized cost

Account maintenance cost in favour of customers’ decline as apercentage of total cost (or as a percentage of revenue)

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Longer term customers tend to be less inclined to switch, and alsotend to be less prices sensitive. This can result in stable unitsales volume and increase in dollar-sales volume

Long-term customers may initiate free word of mouth promotions andreferrals

Long –term customers are more likely to purchase ancillary productsand high margin supplemental products.

Customers that stay with you tend to be satisfied with therelationship and are less likely to switch to competitors, making itdifficult for competitors to enter the market or gain market share

Regular customers tend to be less expensive to service because theyare familiar with the process, require less ‘education’ and areconsistent in their order placement

Increased customer retention and loyalty makes the employees’ jobeasier and more satisfying. In turn, happy employees feed back intobetter customer’s satisfaction in a virtuous circle.

Relationship marketing is centered on understanding customers’ needs at theindividual customer’s level-Bendapudi & Berry (1997), thus the customersare encouraged to use more of the brand or related products and servicesoffered by the firm-Wansink & Ray (1992), as substantial relationshipmarketing efforts are expended on pricing, in a manner to encourage loyaltyby encouraging repeat purchases –Vaura (1993). Care should however be takento ensure that the relationship marketing programmes are designed togenerate committed customers rather than repeat purchases –Levin (1993),Miller (1994), Fulkerson (1996) and Passignham (1998), as committedcustomers have reasonable strong emotional attachment to the product andfirm based on the believe that the firm is treating them fairly and is tosome extent at least, concerned about their well being - Hawkins, Best &Coney (2001). Integrated relationship marketing programmes, for generatingcommitted customers require a customer focused attitude in the firm that istranslated into actions that meet customers needs-Rice (1993) and Conred,Brain & Haramon (1997). Given this discoursehttp://en.wikipedia.org/wiki/relationship-marketing, advocates thatcustomer retention efforts of organizations should be based on thefollowing considerations:

Customer valuation:Gardon (1999), describes how to value customers and categorize themaccording to their financial and strategic values so that companiescan decide where to invest for deeper relationships and on whichrelationships need to be served differently or even terminated.

Customer retention measurement:Dawkins & Reichheld (1990), calculate a company’s customer retentionrate. This is simply the percentage of customers at the beginning ofthe year that are still customers by the end of the year. Inaccordance with this statistic, an increase in retention rate from80% to 90% is associated with a doubling of the average life of acustomer relationship from 5 to 10 years. This ratio can be used to

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make comparisons between products, between market segments and overtime.

Determine reasons for defection:Look for the root causes, not mere symptoms. This involves probingfor details when talking to former customers. Other techniquesinclude the analysis of customers’ complaints and competitive benchmarking.

Develop and Implement a corrective plan:This could involve actions to improve employee practices, using benchmarking to determine best corrective practices, visible endorsementof top management, adjustments to the company’s record andrecognition systems and the use of ‘recovery terms’ to eliminate thecause of defections.

2.5 Keys to Relationship Marketing:Efficiency in relationship marketing management anchores of some keyelements inclusive of:-Berry (1995)

Developing a core service or product around which to build a customerrelationship;

Customizing the relationship to the individual customer; Augmenting the core service or product with extra benefits; Pricing in a manner to encourage loyalty, and Marketing to employees (internal customer marketing) so that they

will perform well for (external customers) customers.

Efficiency in the integration of these keys to relationship marketinggenerates ‘relationship ladder of customer loyalty” that groups types ofcustomers according to their level of loyalty, made up of prospects;customers; clients; supporters; advocates, andpartners-htt://en.wikipedia.org/wiki/Relationship.marketing; hence theobjective of converting prospects and customers to advocates and partnersthrough clients and supporters based on the provision of more personalizedservices that are quality oriented for delight to be achieved.

2.6 Strategies for Customer Retention:Developing committed customers for different institutions inclusive ofthose in the banking sector of Nigeria requires a good understanding ofcustomers’ desires at the point of commencement of exchange and transactionrelationships. At all the stages in this relationship, the vendor isrequired to create satisfaction, delight and affection in the customers-Taher, Leigh & French (1996); through service rendition.

These customer retention strategies embody activities that build barriersto customer switching based on product bundling, cross selling, crosspromotions, loyalty programmes, increasing switching cost and integratingcomputer systems of multiple organizations. Kotler & Keller (2010), O’Brien(2003), Ostenon (2002) and Grant & Schlesinger (1995), advocate the use of

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activities aimed at reducing the rate of customer defection; increasing thelongevity of the customer relationship; enhancing the growth potential ofeach customer through “share of wallet”, cross selling and up-selling;making low profit customers more profitable or terminating them andfocusing dis-proportionate efforts on high value customers; as strategiesfor customer retention management. This work thus ascertains the impact ofthe practice of relationship marketing on customer retention ability offirms in the money deposit banking sector of Nigeria.

2.7 Internal and Interactive Marketing in Relationship Marketing:Relationship marketing prospers most, based on the harmony in relationshipbetween internal marketing and interactive marketing. Internal marketingrecognizes the place for the internal customers and provides that the firmshould hire good quality personnel, train and motivate its customer-contract employees and support service people for team relationships in theprovision of external customer satisfaction-Kotler & Armstrong (2010)Kotler & Keller (2009) and Brian Jones & Shaw (2002), at both marketingfunctions level of sales force management, advertising, customer servicemanagement, product management, marketing research and marketingdepartments’ relationship with other departments-Homburg, Workman & Krohmen(1999), for interactive relationship that pulls all functions anddepartments together for the deliverance of greater marketingaccountability and engaging in marketing programmes-Wood (2003) and Hamburg& Furst (2003).

Good quality internal marketing programmes based on proper integration ofthe principles of management by objectives and total quality management,blended with acceptable internal customer relationship management skillsand techniques anchored on the principles of quality circle, guaranteeefficiency in interactive marketing, as employees’ skill in serving theexternal clients is brought to bear on the technical and functionalqualities of service rendition-Gronoroos (1984), Hartline, Maxham & Mekee(2000), de Jong; de Ruyter &Lemmink (2004) and Hartline &Ferrell (1996), asteam work built on delegated authority especially among frontline employeesgenerates work flexibility and adaptability in service delivery throughbetter problem solving, close employee cooperation and more efficientknowledge transfer. These attributes influence the quality of (product)-service rendered, as customers compare the perceived service with theexpected service-Voss, Parasureman & Grewel (1998), for delight, asperceived value surpass expected value of service based on added benefitsto the offering attributed to relationship marketing –Rust & Oliver (2002).

Given this discourse, the research establishes the impact of managementphilosophy and leadership behaviour on the practice of relationshipmarketing based on the integration of the principles of internal customermanagement, internal marketing and interactive marketing.

2.8 Relationship Marketing and Information Communication Technology:Interactive marketing and its electronic base has improved relationshipbetween the vendors (producers) and the customers with greater promises inthe future; sales volume is enhanced –Kranta (1998), as it allows for

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greater flexibility in the management of elements of the marketing mix-Woolley (1998). Added to these benefits is its wide-customer reach based onlimitless geographical boundaries –Berkowitz, Kerin, Hartley & Rudelius(2000). Despite the associated benefits in interactive marketing and itselements base, firms in the money deposit banking sector of Nigeria likesome other firms globally are yet to tap into this for relationshipmarketing efficiency-Pepper, Roger & Dorf (1999) and Downes & Mlli (1998).

The practice of relationship marketing as facilitated by ability atgenerating customer relationship management soft wares, allows for thelinking and analyzing of individual customers preferences, activities,tastes, likes, dislikes and complaints for the purpose of developingcustomized market offers and associated benefits.

Firms push out corporate and marketing web site information to onlineconsumers rather than wait for consumers to find the sites themselves. Thisas customized information in news, entertainment, company product andservice information are tailored around the customers’ preferences-Charleston (1999) and www.pointcasr.com. Based on reverse action in webapplications, consumers shopping profiles are developed as the customersshop on web sites. Information there-to serves as basis for computingcustomer’s likely preferences in other categories. These predictedofferings are shown to customers through cross-sell e-mail recommendationsand other channels-http://en:Wikipedia.org/wiki/Relationship-marketing.

It is important to note that the period of pre-information communicationtechnology as firms, based on digital technology produced unique andpersonalized pieces for each customer containing their data base withessential highlights of name, addresses, demographics, purchases historyand other variables as well as a reflection of customers’ needs, andpreferences. Based on relationship marketing practice, these data oncustomer have increasing relevance as customers response rate increase.

Based in this analysis, the questions is, is it possible for customerpatronage of firms in the money deposit banking sector of Nigeria toincrease for increased corporate profitability given efficiency in theadoption of relationship marketing principles based on proper integrationof the potentials of the information communication technology.

2.9 Exchange and Transaction in Relationship Marketing:Marketing ordinarily is exchange and transaction focused for customersatisfaction and (vendor) producer’s profit goal and objectiveactualization, hence is reward and deal oriented, with emphasis onacquisition of new customers, sales incentives and product /service uniquecharacteristics. Studies show that although vendors in general marketingpractice promise value and capitalize on thrust as concepts, theinteractive marketing functions that elongate customers’-vendors’relationship beyond the point of exchange is often absent –Baker (1996),Kotler & keller (2010), Keller & Armstrong (2010) and Agbonifoh, Ogwo,Nnolim & Nkamnebe (2007).

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Relationship Marketing is built on both managerial orientation and businessfunction philosophies that integrate corporate, business and functionalstrategies based on the management of the distrust dimensions of marketingculture, strategies and tactics for the purpose of building long-termrelationships with customers and other parties as marketing partners andmembers of the financial community-Kotler & Keller (2010). Relationshipmarketing thus depends on inputs from marketing specialists and non-specialists in different departments across the organization and beyond forthe creation of relationship that ensures the actualization of the desiresof parties and elimination of the challenges incumbent in transactionfocused exchange.

Based on this discourse, after sale supports and services as extended(extra) service characteristics of offer are seen as investment for thesustenance of relationship rather than cost and closure of sales isconsidered the genesis of relationship marketing-Okpara (2002). Given this,this work establishes the position of firms in the money deposit bankingsector in the practice of relationship marketing with regards torelationship with marketing partners and members of the financialcommunities.

3. Analysis:Data as bases of the analysis are ranked based Likert ranking order scaleprinciples and test for significancy of correlationship or otherwise isbased use various test statistics.

Hence the general decision rule is:If the value calculated is greater than 50 (fifty) percent(acceptable mean), accept the projected statement, if otherwisereject.

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Analysis:The issues of analyses are built around the hypotheses of this study as well as relevant questions built into theliterature; hence analyses are as flows: Table1 1. Testing for the level of adoption of the practice of Relationship Marketing in the money deposit banking sector

of Nigeria:The sets questionnaires as administered on top management, employees and customers on relevant issues of theadoption of the practice relationship marketing in Nigeria yielded the following as presented in table 1

Table 1: Level of Adoption of the Practice of Relationship Marketing in Nigeria:

i. Securing and maintaining of customer relation for better long term results based on: BankManagement Bank Employees Bank Customers a. Promotional value of market offer 37 33

20 b. Long term thinking and acting 42 32

23c. Building barriers against customers’ switch based on relationship 3430 22d. Activities aimed at retaining customers and clients 3218 06e. Provision of structures that create customers’ support relations 3021 12

Total 175.0 134.083.0

Mean 35 26.816.6

ii. Assessment of the value of extended features of bank services: a. After sales support and strong services 40 32

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b. Customer expectations and perceptions as focus 36 3120

c. Reward incentives as required to create and maintain relationship and sales returns 3836 18

d. Attitude of bank management towards relationship beyond point of exchange 30 2815

Total 144 12771

Mean 36 3117.75

iii. Assessment of the firms in terms of extra extended service characteristics of implied demand bycustomers

a. Exchange relationship and its thrust on results 30 2117

b. Long term empathy and rapport 35 18 14c. Incentive extension for the purpose of building long term relationship and revenue 36

20 15d. Relationship as a foundation for revenue through trust 30 21

16e. Swift, strong, safe and enduring relationships 32 20

16Total 16.31 100

78Mean 32.6 2015.6

iv. Assessment of service, based on its core related issues of:a. Quality of service 30 28 26b. Price of service 35 24 21c. Treatment of customers 30 22 16d. Contents of after sale services 30 28

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e. Range of services 30 29 22f. Management of customers’ inquiries and complaints 27 25

15g. Personnel personal knowledge of the different service situations 30

31 16

Total 212 187 133Mean 30.28 26.7119.00

v. Assessment of firms based on its ability to identify and satisfy unexpressed needs of the target marketsa. Friendliness, (associated with customers’ need for friendliness, and other characteristics

of politeness and courteousness) 30 17 12b. Understanding and sharing; associated with empathy for customers and appreciating

their circumstances and feelings) 30 2715

c. Treating the customers fairly in business relationships 3328 24

d. Giving the customers the impressions that they have control over the end product in quality and otherwise 28 16 10

e. Giving the customers alternatives as solutions to their problems 2517 12

f. Provision of information and education on services, policies and procedures of the banks 3026 18

Total 476 131 91Mean 29.3 21.815.16

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The data on table 1. are re- structured in table 2 thus:

Table 2: Rating of Bank Services by Management Staff, Employees andCustomers

Variable Management EmployeesCustomers Service for long term relationship 35.00 26.80

16.60Extended features of banking services 36.00 31.00

17.75Extra extended service characteristics 32.60 20.00

15.60Value of bank core service s 30.28 26.71

19.00Satisfaction of unexpressed customers’ needs 29.30 21.80

15.16

Total 163.18 126.3184.11

Mean 32.66 25.26 16.82

Decision Rule:Based on Likert ranking order scale, if the value calculated is greaterthan 50(fifty) percent (acceptable mean), accept the projection that therate of adoption of relationship marketing principles is significantly highin the banking sector of Nigeria.

If otherwise, reject.

The computation on table 2, shows that the mean value of assessment of bankmanagement, employees and customers are 32.66%, 25.26% and 16.82%respectively. These are below acceptable mean percent of 50. Followingthis, the H0 is rejected and H1 accepted, as the rate of adoption ofrelationship marketing principles is significantly low in the bankingsector of Nigeria.

To test for significance at the chosen level of confidence, the meandifference or otherwise between the rating of bank management, employeesand customers on the rate of adoption of the practice of relationshipmarketing in the banking industry in Nigeria, the test hypothesis is re-structured as:

H0: (µ1 = µ2 ≠ µ3) There is no significant difference in theassessment of the bank management employees and customers on therate of adoption of relationship marketing practice in banks.

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H1: (µ, ≠ µ2 ≠ µ3) Significant difference exist between theassessment of the bank management employees and customers on therate of adoption of relationship marketing practice in banks

Where µ1, µ2 and µ3 are means rating of the different classes of respondents

Given: F = Vb = between groups variance = S 2 b(1)

Vw within groups variance S2W

Where: VB = SSB and (2) dfB

Vw = SSW(3) dfw

For computation of f-ratio, table 3 is considered Table 3: Assessment of Relationship Marketing Related Variables in Banks inNigeria:

Management Employees CustomersXA X2

A XB X2B XC X2

C

35.00 1225.00 26.80 718.24 16.60275.56

36.00 1296.00 31.00 961.00 17.75 315.06

32.60 1062.76 20.00 400.00 15.60 243.36

30.28 916.88 26.71 713.42 19.00 361.00

29.30 858.49 21.80 475.24 15.16 229.83

∑XA =163.18 ∑X2A =5359.13 ∑XB = 126.31 ∑X2

B 3267.9∑XC=84.11 ∑X2

C=1424.11 A = 32.66 B =25.26 c = 16.82 n = 5 n = 5 n = 5

20

Grand mean = 32.66 + 25. 26 + 16. 82 3

= 24.91SSW = 33.58+77.05 + 9.90

= 120.53

SSY = SSB + SSW= 24.91+ 120.53= 145.44

Substituting values for variables

VB = SSB dfB

VW = SSW dfw

dfB = number of groups (k) minus 1 dfw = number of the cases within each sub group (n) minus 1

Where VB = Variance between groupVw = Variance within group dfB = Degree of freedom between groupdfw = Degree of freedom within group

Substituting for mathematical notations 2 and 3:

VB = SSB = 673.175dfB 2

= 336.59

VW = SSW = 120.5dfw 12

= 10.04

Substituting the f-ratio mathematical notation 1

f = VB

VW

= 336.59 10.04

= 33.52

Summary of the ANOVA to capture the computation is shown in table 4

21

Table 4: Summary of ANOVA

Source of df Sum of Squares Mean of Squares f- cal CriticalSignificance Decision Variance SS MS value of f Between groups 2 SSB = 673.67 VB = 336.59Significant Reject Within groups 12 SSW = 120.53 VW = 10.04 33.52 2.96

H0

Total 14 79420 346.63Conclusion:At 0.05 level of significance, the critical value of f = 1.70

Since F > F0.05 (2.96), the H0 is rejected, the accepted conclusion is thatthe mean values are not equal. Hence significant differences exist betweenthe assessment of the bank management, employees and customers on the rateof adoption of relationship marketing practices in banks in Nigeria. Therating of managers and employees of banks on the rate of adoption ofrelationship marketing principles are higher compared with the rating ofcustomers, although the level (rate) of adoption of this principle isrelatively low. Test 2:Assessment of the appropriateness or otherwise of the management style and attitude of firms in the money banking industry and its impact on the adoption of relationship marketing principles in Nigeria banking sector

Data for this assessment as generated are thus in table 5

Table 5: Assessment of Money Deposit Banks Work Group Management Philosophies Issues of Assessment: Management Employees 1. Assessment of management in terms attitude to

quality circle activities of:a. Management and team members joint responsibility in goal

determination and planning of work 45 40

b. Management and team members in cross training 61 52

c. Management and team members in sharing of information

at all levels 43 42

d. Continuous learning based on interpersonal, administrative and technical trainings 40 38

e. Management and team members’ attitude towards risk takingand supportive activities 41

36

22

f. Permitting people to work together 56 42

g. Attitude to reward as based on individual’s performance and contributions to corporate performance 48

40h. Work on individual basis, for continuous improvement of

methods and processes 58 47

Total 392 337Mean 49.0

42.132. Assessment of management and corporate activities based on the

following integrals of the principles of open book management a. Attitude to involving subordinates on business decision issues

56 32b. Sharing of financial and operational information with employees 51

26c. Educating employees based on financial information 50

22d. Sharing with employees the impact of their work (efforts)

on corporate financial results 45 20

e. Linking non-financial measures to financial results 60 21

f. Targeting priority areas and empowering employees to make improvements 60 42

g. Reviewing of results together and keeping employees accountable 50 40

h. Post result events and celebration of success with employees 60 30

i. Distribution of bonus awards based on employees contribution to financial outcome 50 16

j. Sharing of ownership of firm with employees 20 06

Total 502 255

Mean 50.2 25.5

3. Assessment of Management in terms of Task Performance Management Employees leadership style (philosophy)a. Strictness in observation of regulations 30

65b. Level of issuance of instructions and orders 50

80

23

c. Strictness over volume of job done 40 72

d. Strictness over time schedules and job specifications 50 68

e. Achievement of maximum capacity 50 70

f. Reaction to situation of greater job inadequacy compared to jobadequacy 60 80

g. Level of precision about work plan and achievement within defined time. 67 82

h. Strictness in demand for report on work done 60 80

Total 407 597Mean 50.86 74.62

4. Assessment of Management in terms of Maintenance Leadership Style (Philosophy)a. Liberty at superior –subordinate discussions 60

40b. Level of support received from superiors 63

42c. Superiors’ concern about subordinates personal problems 60

40d. Level of trust superiors have for subordinates 60

30e. Willingness and liberty at recognizing sub-ordinates for well

done job 50 18f. Superiors’ attitude and opinion to solution to problems at work

place 60 25

g. Superiors’ concern about the future benefits of sub-ordinates60 20

h. Fairness in treatment to sub-ordinates 50 15

Total 463 230

Mean 57.88 28.75

5. Assessment of Management in Terms of Attitude to factors that enhance the quality of Work Life of Sub-ordinates (employees).a. Adequacy and fairness of compensation 60

22b. Provision of safe and healthy environment 50

21

24

c. Availability of job that develop human capacity 60 40

d. Provision of opportunities for personal growth and security 50 38

e. Social environments that foster personal identity, freedom from

prejudice, sense of community and upward mobility 60 41

f. Constitutionalism as right to privacy, decency and due process58 42

g. Work role that minimizes infringements on personel leisure and family needs 56 30

h. Socially responsible organizational actions 60 28

Total 454 262

Mean 56.75 32.75

For the adoption of the spearman’s rank correlation co-efficient todescribe the relationship or otherwise that exist between the assessment ofthese two groups of respondents (management and employees) on the attitudeof management to the enhancement of the work life of subordinates withoutmaking any assumption about the frequency distribution of the variables-htt://en.wiki.pedia.org/wiki/spearman’s ranking; this work adopts thecorrelation-co-efficient statistical tool represented by the mathematicalnotation 4

rs = 1 – 6 ∑ d 2 (4)

N(N2-1)

Where: d = the difference between each rank of corresponding values of x and y

N = the number of pairs of values

Table 6 is the restructured data in table 5

Table 6: Percentage Distribution of Management and Employees Responses on Management’s

Work Group Management Philosophy

Issues Management Employees Quality Circle 49.00 42.13Open Book Management 50.20 25.50Performance Leadership Philosophy 50.86 74.63Maintenance Leadership Philosophy 57.88 28.75

25

Quality of Employee Work Life 56.7532.75

Total 265.69 203.76Mean 52.94 40.75

Projection:Accept that improper combination of performance and maintenancebehaviours in the management of money deposit banks in Nigeria doesnot significantly challenge the adoption of relationship marketprinciples if mean rate of both set of respondents (individually) isabove 50%.

If otherwise, reject.

Table 6, shows that management assessment of the appropriateness and impactof corporate managers leadership philosophy (style) on the adoption ofrelationship marketing principles is at 52.94%, while employees’ assessmentis 40.75% on a 100% ranking scale 52.94% is above mean, thus is considereda high assessment by management and 40.75% is a low assessment byemployees. These statistics show difference in mean assessment by the twogroups of respondents.

To assess for the degree of significance in difference of mean assessments,the hypotheses (H0) is re-structured thus:

Hii: There is no significant difference between percentageassessments of management and employees on the appropriatenessof corporate managerial philosophy (style) among firms in themoney deposit banking sector in Nigeria

Hiii: There is a significant difference between percentageassessments of management and employees on the appropriatenessof corporate managerial philosophy (style) among firms in themoney deposit banking sector in Nigeria.

The test is at 0.05 level of significance, and the decision rule is toaccept the null hypothesis if the rs is less than the Qr, or test ofsignificance.

Following this, the spearman’s rank correlation coefficient as a non-parametric measure of correlation is adopted based on data on table 7.

26

Table 7: Components of r s in Rank Correlation Co-efficient

Management Employees Rx Ry RX - Ry

(Rx - Ry )2

x y Ranking of Ranking of = d= d2

x y49.00 42.13 1 4 -3952.20 25.50 2 1 1150.86 74.63 3 5 -2457.88 28.75 5 2 3956.75 32.75 4 3 11

∑d2 = 24Substituting the mathematical notation 4

r2 = 1 - 6 ∑ d 2 (4)

N (N2 – 1)

= 1 – 6 (24)5 (25-1)

= 0.200

The test of significance Qrs; for this test, the statistic is conductedusing mathematical notation 5, represented thus:

Qrs = Z -1 (5) n- 1

= 1.96 (1) 15-1

= 0.98

Where z is standard normal deviation and which at 0.05 level ofsignificance is given as 1.96

Following the results of the computations, the decision is to accept thealternative hypothesis since rs is less than the Qrs . It is thereforeconcluded that the test is insignificant at 0.05 level of confidence; hencethe position of this work is to reject the alternative hypothesis. Thus

27

there is no significant difference between percentage assessment ofmanagement and employees on the appropriateness of corporate managerialphilosophy (style) among firms in the money deposit banking sector inNigeria.

The assessment of employees is accepted as they (consumers) are the directtarget of the managerial philosophy. The work therefore concludes that thecorporate managerial philosophy of firms in the money deposit bankingsector of Nigeria shows improper combination of the performance andmaintenance behaviours. Thus the internal marketing activities based onemployees’ and departmental relationship is poor, hence relationshipmarketing with its thrust as external customers is poor in the bankingsector in Nigeria.

Test 3:Assessment of the level of maximization of the benefits of relationshipmarketing by management of money deposit banks in Nigeria.

Data for this assessment and analysis are based on table 8

Projection: Accept that the benefits of relationship marketing practice aresignificantly maximized by firms if mean assessments are above 50%, thatis the acceptable mean score.

If otherwise Reject

Table 8: Maximization of the Benefits of Relationship Marketing:

Issues of Assessment Management Customers

a. Long term relationship built on promises, trust and interactive marketing and its impact on turnover 40

32b. Profitability following reduction in cost of serving

customers and absence of switching costs 48 28

c. Confidence in internal marketing activities following the development of marketing network 40

32 d. Customer retention and loyalty based on customization of offer

40 40e. Adaptivity and responsiveness resulting to reduction of customer

stress 4032

f. Publicity gained based on word of mouth of communication 40 25

g. Cost reduction in marketing activities 43 31

28

h. Pre-payment by customers based on customer confidence creation 28 08

Total 31922.8Mean 39.8828.5

Data based on table 8 show clearly that firms in the money deposit bankingsector in Nigeria do not maximize the benefits associated with thepractice of relationship marketing. Both the management and employees ofdifferent banks scored the firms’ benefits maximization ability at a meanvalue of 39.88% and 28.5% respectively. These scores are below theacceptable mean value of 50% on a 100% ranking scale, thus the projectedstatement is rejected. Accepted is that the benefits of relationshipmarketing practice are not significantly maximized by firms in the moneydeposit banking sector of Nigeria.

To test for the degree of significance in mean variation between thescores of corporate management and employees (personnel) of theseinstitutions, the students’ t-test statistics for difference of mean isadopted. This is represented by mathematical notation 6

t = 1 - 1 2 (6)

S 2 1 + S 2 2 n1 n2

Where: 1 = mean of the first category2 = mean of the second categoryn1 = sample size of the first category n2 = sample size of the second category S2

1 = variance (S21) or standard deviation (s) of the first

category S2

2 = variance (S22) or standard deviation (S2) of the second

category

Data on table 8 are re-structured for table 9 thus: Table 9: Benefits Maximization Based on the Practice of RelationshipMarketing

Variable Management (X1) Employees (X2)a 40 32b 48 28c 40 32d 40 40e 40 32f 40 25g 43 31h 26 08

The hypotheses are re-structured thus:

29

H01: There is no significance difference between theassessment of corporate management and employees on theability of firms in the money deposit banking sector ofNigeria to maximize the benefits of relationshipmarketing.

H1: There is significant difference between the assessmentsof corporate management and employees on the ability offirms in the money deposit banking sector of Nigeria tomaximize the benefits of relationship.

Substituting t – test for mathematical notation (formula) 6

t = - 2 S 2 1 + S 2 2

n1 n2

t = 39.875 – 28.5 (5.566)2 + (9.319)2

8 8

= 2.96

At 0.05 level of significance and 14 degrees of freedom, the criticalvalue is given 1.761. Since 2.96 is greater than 1.761, the decision is toreject the null hypothesis. Hence there is significance difference betweenthe assessment of corporate management and employees on the ability offirms in the money deposit banking sector of Nigeria to maximize thebenefits of relationship marketing; although the assessments of bothmanagement and employees in this sector are below the acceptable mean of50%, thus are low.

Test 4 Assessment of the ability of money deposit banks at the maximization ofthe role of information communication technology in the practice ofrelationship marketing.

Projection:Accept that inability to maximize the role ICT does not havesignificant effect on the adoption of relationship marketingpractice in Nigeria, if calculated mean is greater than 50%

If otherwise; reject This assessment and subsequent analysis is based on data on table 10

Table 10: Assessment of the rate of and challenges to the adoption of information communication technology.

Issues of Assessment Management Customers a. Impact of cost on access to ICT services given

30

the low level of per capita income in Nigeria30 26

b. Impact of the unfavourable rural/urban population density on access to ICT 20

12c. Perception of ICT as luxury rather than necessity 28

26d. Impact of the high level of illiteracy in Nigeria on the use of

ICT facilities 2620

e. Impact of the low level of communication between ICT service subscribers and service providers on service consumption

21 19f. Lack of access to bank customers and to the needed customers data base

19 16g. Ability of information communication technology to create customer

value 20 18

Total 164 137Mean 23.4319.57

Discerned from table 10 is that ability of money deposit banks in Nigeriaat maximizing the role of information communication technology in thepractice of relationship marketing is low and below the acceptable meanvalue of 50%. This is assessed at 23.43% and 19.57% respectively by banks’management and employees and external customers. Thus, this work concludesthat inability to maximize the role of technology of informationcommunication significantly affects the level of adoption of the practiceof relationship marketing in Nigeria.

To establish the strength of correlationship or otherwise between the meanof the two groups of respondents (bank management and employees, andexternal customers), the pearson correlation co-efficient R is adopted asrepresented by mathematical notation 7 thus:

rxy = ∑ ( x - )(y - ) (7)

nSx Sy

Where: X and y are each values of x and y andare mean values of x and y SX and Sy are standard deviation of x and y, and n is the number of paired values .

The values in table 10 are re-structured on table 11

Table 11: Assessment of ability to maximize the Role of ICT inRelationship Marketing Management

31

Variables Management X CustomerY

a 30 26b 20 12c 28 26d 26 20e 21 19f 19 16g 20 18

The computation of rxy is shown in table 12

Table 12: Required Computations for Calculating r xy x y x- (x-) y - (y-)

(x- )(y- )30 26 6.57 43.16 6.43 41.34

42.2420 12 -3.43 11.76 -7.57 57.30

25.9628 26 4.57 20.88 6.43 41.34

29.3826 20 2.57 6.60 0.43 0.18

1.1021 19 -2.43 5.90 -0.57 0.32 1.3819 16 -4.43 19.62 -3.57 12.74

15.8120 18 -3.43 1.76 -1.57 2.46

5.38∑x = 164 ∑y =137 ∑(x -) ∑ (y -) ∑(x-)(y-) 23.43 = 19.57 =119.68=154.68 = 121.25

Substituting for mathematical notation 7

rxy = ∑ ( x - )( y - ) nSx Sy

= 121.257(1.82)(2.08)

= 4.57

Based on the computation, a correlation of 4.57 is established, showingpositivity in correlationship between the assessments of banks managementand employees as x variable and employees as y variable.

32

For the test of significant of the correlation, this work adopts thestudents’‘t’ test statistic with mathematical equation represented as 8thus:

t = r n – 2 (8)

1-r2

= 4.57 7-2 1 – 4.572

= 0.51

Where: r is the value of the pearson correlation n is the number of paired observations.

To conduct this test, these re-structured hypothesis are considered

H0: µ = 0 (there is a linear relationship between x and y H0: µ ≠ 0 (there is no linear relationship between x and y

The value of the t computed is 0.56, at 0.05 level of significance and 5degree of freedom (7-2), the critical value of the ‘t’ statistics is givenas 2.015, This test is significant, thus the null hypothesis is rejected.Accepted is that there is a linear relationship between the assessment ofcorporate management and employees (x) and external customers (y) henceit is inferred that inability to maximize the role of informationcommunication technology in the banking industry in Nigeria significantlyaffects the rate and level of adoption of the practice of relationshipmarketing.

Test 5Assessment of the level of efficiency in internal marketing management andits contribution to efficiency in the adoption of relationship marketing.

Projection:Accept that inefficiency in internal marketing management does notcontribute to inefficiency in the adoption of relationship marketingin Nigeria, if calculated mean is above 50%

If otherwise reject This assessment and analysis is based on data generated based on table 13

Table 13: Assessment of Variables Considered vital in Internal MarketingManagement for Relationship Marketing

Issues of Assessment Management Employeesa. Policies of employee development of:

i. Recruitment 6025

ii. Training 5530

33

iii. Communication of customers’ value 4525

iv. Reward system 5528

v. Administration, internal force in choice of policies and provision of direction 60

40b. Internal marketing orientation to relationship marketing goals

and concepts 6028

c. Building of creative marketing organization based on:i. Development of company wide passion for internal customers

65 28ii. Organizational policies built around natural customers

segments rather than service 60

25iii. Understanding internal customers based on qualitative and

quantitative research 5018

d. Design and execution of internal customer chain relation 5221

Total 562265Mean 56.226.5

It is discerned from table 13, that the mean value for corporatemanagement and employees’ assessment of the level of efficiency on theadoption of internal marketing as pre-requisite for marketing networkbased on interactive marketing and for external marketing –Kotler &Armstrong (2010), Kotler & Keller (2009) and Berkowitz, Kerin, Hartley &Rudelius (2000), vary; corporate management assessed this at 56.2% whileemployees have it as 26.5%. Based on the 50% acceptable mean value,corporate management’s assessment is high while employees’ assessment islow. This work is inclined to accepting as correct, the assessment ofemployees as the internal customer target of internal marketing and thebasis of test of efficiency based on perceived and actual satisfaction.

However, for an unbias conclusion, the mean of the means of the variousgroups’ assessment is determined as:

56.2 + 26.5 2

= 41.35%

This 41.35% as mean of means is below acceptable means value of 50%, hencethis work concludes that the level of efficiency in the adoption of

34

internal marketing principles and practices in the money deposit bankingsector in Nigeria is low. This accounts for the poor rate of contributionof relationship marketing to corporate profitability as external customersare not maximally satisfied based on corporate value creation, givenactivities of poorly motivated work force.

For the determination of the degree of significance or otherwise of thevariance of the assessment of corporate management and employees onefficiency in the adoption of internal marketing principles; thespearman’s rank correlation co-efficiency statistics is adopted asrepresented by mathematical notation 9

rs = 1 – 6 ∑ d 2 ( 9)

N(N2 – 1)

Based on values in table 14, rs is computed

Table 14: Components of the r s (Efficiency in Adoption of Internal Marketing Practices).

Corporate Employees Rx R1 RX - Ry = (Rx -Ry )2

Management ranking of ranking of d

=d2

x y60 25 6 3 3 9’55 30 4 8 4 16’45 25 1 3 -2 9’55 28 4 7 -3 9’60 40 6 10 -416’60 25 6 3 3 965 28 10 7 3 960 25 6 3 3 950 18 2 1 1 152 21 3 2 1 1

∑d2=83

The hypotheses are presented thus:

H0: There is no significant difference between percentageassessment of corporate management and employees on thecontribution of efficiency in internal marketing practice toefficiency in relationship marketing in the banking sector ofNigeria.

H1: There is significant different between percentage assessmentof corporate management and employees on the contribution of

35

efficiency in internal marketing practice to efficiency inrelationship marketing in the banking sector of Nigeria.

This test is executed at 0.05 level of significance and the decision ruleis to accept the null hypothesis as the rs is less than the Qr.

Thus substituting for the mathematical notation 9,

rs = 1- 6 ∑ d 2 N (N2 – 1)

= 1 – 6 (.83)10(100-1)

= 0.50

The test of significance Qrs for this test statistics is based onmathematical notation 10

Qrs = Z – 1 (10)

n – 1

= 1.96(1) 10.1

= 0.65

Where Z is standard normal deviation, which at 0.05 level of significanceis given as 1.96

Deducing from the computations, the decision is to accept the null

hypothesis since rs is less than the Qrs,. Conclusion therefore is thatthere is significant difference between percentage assessment of corporatemanagement and employees of firms in the money deposit banking sector inNigeria on the contribution of efficiency in internal marketing practiceto efficiency in relationship marketing.

4. Findings:The following are findings of this work:

1. The level of adoption of relationship marketing principles isrelatively low in the money deposit banking sector of Nigeria.Investments in relationship marketing with the external customers astarget is relatively high, (but still low) contemporarily comparedto the pre-bank consolidation period of 2004. However given the lowbank density situation, high level of rural /urban dwellers ratio,

36

and high level of illiteracy in Nigeria, banks have more customersthan they can attend to, hence the effect of relationship marketingis still very low as expressed in labour performance.

2. Money deposit banks’ corporate management have common leadershipstyle (philosophy) that favour task performance rather thanmaintenance leadership style, hence quality of work life ofemployees is not emphasized nor are they inclined to the adoption oftotal quality management, management by objective nor open bookmanagement policies respectively. Few cases of adoption of qualitycircle activities in banks are strictly informal.

3. The level of maximization of life benefits of relationship marketingis still very low. External customers rather cast their confidenceon employees on personal basis rather than on the banks operatingsystem and the services they are able to render.

4. The high level of illiteracy (quantitative rather than qualitativeliteracy), high level and rate of rural dwelling rather urban, lowper capita income and low bank density rate make access toinformation communication technology luxury rather necessity. Theseaccount for the inability of firms in the money deposit bankingsector of Nigeria to maximize the benefits of informationcommunication technology for relationship marketing managementpractices.

5. Operational policies tailored around employees development are notinternal marketing oriented, thus do not enhance the actualizationof relationship marketing objectives, they do not enhance thebuilding of creative marketing departments nor organization, neitherare they designed nor executed for internal customer chainrelationship building.

6. Interactions, interviews and observations as part of this researchdata sourcing exercise show that the current high profit declared bymoney deposit banking firms in Nigeria is not generated based oncustomer turnover as an index of customers satisfaction but as aresult of high service charges and low interest rates on depositsand savings.

5. Discussion of Findings:Relationship marketing builds mutual satisfying long term relationshipwith principal members of organizations’ target market, made up of thecustomers, employees, marketing partners and financial community with theobjective of earning and retaining their patronage at profit –Kotler &Keller (2009). This demands that all corporate policies and strategiesmust aim at optimizing the interests of members of these principal targetmarkets without sub-optimizing the welfare of stakeholders.

The achievement of the objectives of relationship marketing calls for thebuilding and sustenance of marketing network of relationships betweenmarketing specialists and non-specialist, inter and intra departments ofthe firm for the conceptualization and development of offers that meet theneeds and tastes of individuals and groups as target markets based on thedemographic, geographic and psychographic characteristics of the target

37

markets as well as benefits sought in the offer, tailored around the basicelements of (place, price promotion and product) marketing. Given this,the vendor is able to secure customer loyalty as well as retain customersfor profit over a long period of customer life span, following reductionin cost of serving the customers.

The practice of relationship marketing in the money deposit banking sectorin Nigeria does not show these indices as they are cmmon with someadvanced economics. These deficiencies are attributed to the following:

Leadership of most firms in the money deposit banking sector ofNigeria are more performance task oriented than maintenance taskdriven, thus employees’ grievances and turnover is high. Theimbalance created favours the welfare of the employers against thoseof employees, thus employees are always on the heat of pressure andstress to meet schedules and expectations- Bateman & Snell (2000).This work also established the fact that employees in the moneydeposit banking sector of Nigeria feel they are poorly treated bythe reward they receive (implicit and explicit) and the process ofdetermining their reward, thus they express dis-satisfaction. Giventhis, the industry experiences either or a combination of highlabour turnover; absenteeism, lower corporate citizenship, moregrievances and law suits; strikes; stealing, sabotage, andvandalism, and poor mental and physical health standards asevidenced by high level of job stress-Herne & Louke (1985). Theseconsequences are indices of poor quality of work life and dis-satisfaction increase corporate operational costs directly andindirectly –Bateman & Snell (2000). The situation in the moneydeposit banking sector in Nigeria accounts for why employees of thebanking industry constitute over 20% of applicants in FederalGovernment and oil sector advertised job vacancies-research surveyreport (2014). Management of firms in this industry operate based on traditionalenvironments rather than team environment. Thus are characterizedthus: managers determine and plan work; jobs are narrowly defined;cross –training is viewed as inefficient; most information are“management property”; trainings for non-managers, focus ontechnical skills; risk taking is discouraged and punished; peoplework alone; rewards are based on individual performances andmanagers determine “best methods” of rewarding employees-Zenger &Associates (1994).

These features of management of firms in the money deposit bankingindustry in Nigeria affect negatively the morale of employees aswell as their ability to enhance the quality of the external andextra extended features of services in offer, thus trust, promiseand interactive marketing as core issues of relationship marketingare advertised but are not integrated into the offer for customervalue creation. Employees of the banking industry remain inemployees so long as more promising job offer does not exist.

38

Total quality management technique and principles, management byobjectives; and open book management technique as relationshipbuilding and management techniques and principles are exclusiveprivilege of top managers as sub-ordinates take –orders.

The situation and mode of management in this industry is attributedto lack of competition in the industry and to the gross inadequacyin number of banks (under banking) in Nigeria. The few number banksand branches available are managed based on market oligopolystructure with tendency to collusion for market force control.

Banks employees are not exposed to self managed team activities astraditional work groups; such as quality circles, semi-autonomouswork groups, autonomous work group nor self-designing teams whichgenerate benefits of lower costs of operation and greater levels ofteam productivity, quality and customer satisfaction-Kirkaman &Shapiro (1997), as well as improvement in organizational finance andoverall performance-Macy & Isumi (1993), in addition to theenhancement of marketing network and interactiveness.

Relationship marketing creates and sustains contacts between theservice providers and the customers which yields service encountersthat influence the customers’ assessment of the item (service)acquired –Berkowitz, Kerin, Hartley & Rudelius (2000). Relationshipmarketing also creates opportunities for the development of socialbonds through loyalty incentives and other service benefits such ascontinuity of a single provider, customized service delivery,reduction of service stress based on repetitive purchase process andabsence of switch costs. The thrust of relationship marketing isbalanced, given the thresholds of loyalty, benefits and respects forprivacy –Berry (1995), Bitner (1995), Givinner, Gremter & Bitner(1998), Fournier, Dobscha & Mick (1998) and Petrof (1997).

In the banking industry in Nigeria, perceived value of service offeras the overall customers’ assessment of the ability of the servicebased on perceptions of what is received and what is given-Zeithaml& Bitner (2000) is relatively low, hence continued sticking to therelationship is perceived low in the presence of alternative sourcesof service. The situation is so in Nigeria as customers of banks donot assess service satisfaction as high above that which areobtained based on transaction marketing arrangement-Agbonifoh, Ogwo,Nnolim & Nkamnebe (2007).

Customers’ level of trust and confidence in service relationship isassessed to be low especially as it is difficult to predict theoutcomes of relationships with reasonable degree of accuracy,anxiety is high and comfort is low-Zeithaml & Bitner (2000). Thissituation is more given constant future in ATM services, constanthigh customer pressure on fewer frontlines customer managers inbanks and gradual implementation of the banks’ cashless policy inthe absence of enabling technologies. It must be observed that

39

ability to build confidence and trust in banks’ external customersis considered more important compared with the value of the coreservice –Agbonifoh, Ogwo, Nnolim & Nkamnebe (2007).

Customers of the Nigeria banks develop personal relationships withfrontline managers rather than the banks as system orientedorganizations. Customers transfer account from one bank to anothergiven transfer of service by frontline managers. Importance placedon social benefits by customers is placed on personnel rather thanthe institution. This shows inefficiency in the practice ofrelationship marketing as the services at the various customerstouch points are influenced by the personal disposition of thepersonnel given various internal and external stimuli as personnelincentives. This negates the place of social benefits as a criticalcomponent of consumer social support system-Adelman, Ahuvia &Goodwin (1994), as social benefits that result from relationshipmarketing is considered more implicit to the customer’s quality oflife compared to the technical benefits of the offer-Zeithaml &Bitner (2000).

Based on relationship marketing, customers of the different banksare expected to be motivated based on special treatments andprivileges considered preferential. Though customers may be grantedquick attention and paid with mint notes and preferreddemonstrations- Agbonifoh, Ogwo, Nnolim & Nkamnebe (2007), theseservices are not policy based, rather are influenced more by thepersonal relationship customers have with frontline personnel. Inthe areas liberal credit facilities and access to bank servicesoutside official schedules, charges are uniform without regards tolength of period of customer relationship.

Relationship marketing as two ways relationship in every transactionis expected to yield benefits to the service providers, hence oughtto ensure enhanced turnover, customer loyalty and profit, based onconfidence built in the customer by the services provider. In theNigeria situation, turnover and profitability among banks are notattributed to relationship marketing activities but the nature ofthe economy, following the low bank density, high level ofinsecurity based on social vices, and inadequacy of basicinfrastructure. Hence customers are compelled to patronize banks.

Even at this, the profitability of banks is majorly attributed tohigh service charges and low rate of interest on deposits andsavings. The current directive on banks to reduce charges onservices and increase interest on savings-CBN directive (2013) isputting pressure on banks management to remain as profitable asperiod before the directives. This same pressure has been shiftedto branch managers and other employees, thus profit rather thanrelationship is emphasized.

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It is obvious that relationship marketing reduces the cost ofmanaging existing customers, hence boosts profit and contributes tomacro economic development-Zeithaml & Bitner (2000), and Agbonifoh,Ogwo, Nnolim & Nkamnebe (2007), as start up costs associated withattracting new customers are avoided. In Nigeria, there isunfavourable relationship between the demand and supply of bankservices, thus excess demand is recorded, following the underbanking syndrome. This situation compels customers to bank loyalty.

Banks like most other business outfits, given the arrays ofsatisfaction, loyal and retained customers enjoy publicity based onword of mouth communication-Smith (1993) and Agbonifoh, Ogwo, Nnolim& Nkamnebe (2007). In the Nigeria experience, most banks havedysfunctional publicity based on word of mouth communicationfollowing cases of failure in service delivery, delay in servicerendition, high cost of service and im-personal relationship inservice encounter. This however does not impact negatively on banksturnover, nor on profit as customer loyalty is almost constant givenun-availability of alternative to banking and paucity of ‘viable’competition in the industry.

Advertising in the banking industry in Nigeria is intra rather thaninter industrially oriented, thus customers are wooed to leave theirpresent banks to others. This, by this research assessment yieldsless than desired returns as the services of the different firms inthe industry can hardly be differentiated based on any knowncriterion; not even relationship marketing.

Firms in the money deposit banking sector of Nigeria are yet tomaximize the benefits associated with relationship marketing onsatisfaction, loyalty building, customer retainership and profitenhancement given the poor structure of the industry which hasgreater propensity to excess demand for banking services.

Internal marketing as the strong base for relationship marketing isfocused at ensuring the quality of the personnel of organizationsfor rich and qualitative service to the customers-Gronroos (1984).Thus marketing activities vital to influence employees for favorabledisposition toward customers are encouraged. It is thereforeadvocated that firms especially in competition prone sectors andeconomies should be involved in quantitative employees developmentprogrammes with it origin as personnel recruitment, training,communication and administration, inclusive of rewards-Gilly &Wolfinbarger (1998). This is because employees play vital role inattracting, building and maintaining relationships with customers-Tansuhj, Randall & McCullough (1998), and for causing changes incustomers’ purchase process-Gruca (1994).

For internal marketing objectives as sub objective of relationshipmarketing to be achieved, every person (employer and employee) ofthe firms in the money deposit banking sector of Nigeria are

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required to buy into the concepts and goals of marketing and beengaged in choosing, providing and communicating customer value-Kotler & Keller (2009). This is not so in Nigeria as top managementand bank owners at the directorate level, formulate objectives,policies and strategies without inputs from low level managers andother employees, inclusive of frontline managers. Subsequentlyemployees do not internalize these objectives, policies andstrategies, but are compelled by quest for job to adopt themarketing concepts they themselves have not bought.

Internal marketing programmes in the money deposit banking sector ofNigeria do not develop in employees, a company –wide passion forcustomers, as programmes are organized around products-instead ofcustomer segments. This is because these firms do not desire tounderstand customers based on qualitative and qualitative researchactivities. These internal marketing tasks aimed at building acreative marketing organization are not easily executed but the payoffs are considerable –Brynjolfssm & Hitt (1996).

Marketing of banking services in Nigeria is still organized based onthe routine work done by the sales department as against the complexgroup of activities that spread through the organization-Brian Jones& Shaw (2002), hence the practice in Nigeria is built aroundmarketing, customer services, operations among others asdepartments.

Banking activities are not policy designed and executed, thus do notachieve internal customers chain relationship. They are not orientedto care and believe in the service characteristics of their offerneither are these employees motivated to work hard and feel greaterloyalty to the firm, rather to profit objectives of the firm.Internal marketing activities of these firms are not targeted atchoosing the right moment and ideal opportunity to captureemployees’ attention and imagination. Messages are not built tomatch and link internal and external customers characteristics andemployees are poorly motivated to project the firm above self-Mitchell (2002) and Bendapudi & Bendapudi (2005). Given the above,customer failure rate of banks is high –Zeithaml (1981).

Firms generally, like those in the money deposit banking sector ofNigeria compete based on effective internal resources analysis asresources are considered source of competitive advantage-Bateman &Snell (2009). Such resources among other things must be instrumentalfor the creation of customer value, thus must be well managed tosuit the characteristics of the target market.

In the case of the money deposit banking sector of Nigeria, theinformation communication technology (ICT) as basis for customerrelationship does not match the characteristics of the bank servicecustomers; as more than 50% of Nigerian live below the poverty line–BBC News (2007), World Development Report (2003)and National Bureauof Statistics (2012); 70% of the country’s population live in rural

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areas-Nkanga (2007) and World Bank Report (2012) and 85% of the 60million adults in the country under the age of 35 can neither readnor write –Onah (2007). Based on these analyzed characteristics of Nigerians and the costassociated with the usage of ICT for bank services consumption,access to ICT services given the low level of per capita income inNigeria is difficult. It is equally observed that the inbalance inthe rural –urban dwelling situation which is inclined more to ruraldwelling and the poor bank density situation as well as the state ofunder banking in Nigeria do not permit effectiveness in ICT bankingservice marketing.

The high level and rate of illiteracy and the incidence of povertymake Nigerians consider ICT banking services and their marketing asluxury rather necessity –Hilbert (2012), especially based on thecost implications.

Given this situation, communication gap exists between the users(banks services) and ICT service providers’ customers; vendors(marketing organizations) of information communication technologyservices and banks as industrial consumers of ICT services on atripartite relationship. These gaps and subsequent lack of access tobanking services customers’ data base, hinder effectiveness inexchange of information electronically, based on collection, storageand analyses for efficiency in relationship marketing. The provisionof customized services requires knowledge of the customers, theirservice preferences, their individual approach to interacting withthe banking service providers and how customers make purchases.

Based on the above, it is the considered opinion of this work thatthe practice of relationship marketing in the money deposit bankingsector in Nigeria is far below accepted (standard) level, howeverhope of growth is high giving some on going re-structuring exercisesand associated policies in this sector of the economy.

6. Recommendations:The money deposit banking sector of Nigeria and the firms there-in isinsulated from (inter sectoral) competition inspite of the presence ofrivalry among current competitors, threat of new entrants, threat ofsubstitutes and power of customers based on the over bearing influence ofthe suppliers of banking services and the characteristics of the offer andinability of government to cause money deposit banks to comply withpolicies that are aimed at reducing the impact of under banking and lowbank density on the economy. Therefore, given this situation of excessdemand for banking services, the practice of relationship marketing hascontinued to remain poor. This work recommends the following:

To kindle the practice of relationship marketing in this sectorrequires aggressive banking sector reform policies that will breakthe implicit market oligopoly in the banking sector of the economyand expand the industry beyond the urban and semi urban targetmarkets and reduce the existing unacceptable banking density. This

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will stimulate intra industrial competition both for internal andexternal customers.

It is also important that policies are tailored toward addressingthe issue of poor per capita income in Nigeria. This work recommendsthat workers as suppliers of labour be paid on hourly basis and theliberalization of employment policies to permit suppliers of labourto hold more than one regular employment at a time. This willenhance the citizens’ earning power, their standard of living orability to afford the services of information communicationtechnology based firms.

Corporate philosophies are influenced by the philosophies ofownership of firms. To this end, management of firms in the moneydeposit banking sector of Nigeria should consider transformationalleadership. Hence, should be focused at getting employees motivatedto transcend their personal interest for the sake of the group-Bateman & Snell (2009). The transformational process is consideredan extension beyond traditional transactional approach toqualitative leadership-Bass (1985). Transformational leadership ischaristic, gives employees individualized attention and isintellectually stimulating, thus is not dispassionate rather itexcites, transforms, empowers and inspires employees to focus on theinterests of the group-Bateman & Snell (2002). These characteristicsof leadership are vital for internal and interactive marketingactivities as bedrock for relationship marketing.

Management of firms in the money deposit banking sector of Nigeriaas a matter of necessity are expected to ideally integrate theperformance and maintenance dimensions of leadership behaviour witha view to optimizing the goals and objectives of the firms withoutsub-optimizing the welfare of employees. Either extreme behaviour;for performance, highlights organizational interest at the expenseof employees’ welfare and maintenance for employees’ welfare at thedetriment of corporate interests. Effective managers exhibit task-oriented behaviour that favourplanning, scheduling, coordinating, provisions of resources andsetting performance standards and relationship-oriented behaviourthat showcase trust and confidence in employees, acting friendly andconsiderate, showing appreciation, keeping employees informed amongothers. These dimensions of leadership behaviour are vital for thetask performance and group maintenance dimensions –Bateman & Snell(2000), thus are considered vital for spurring up employees forquantitative and qualitative marketing relationships with corporatecustomers, thus should be considered the anchor for relationshipmarketing in the money deposit sector of Nigeria.

Customer service failures in this service industry could be managedby re-designing the process of services rendition and re-definecustomers’ roles with a view to simplifying customers’ serviceencounters; incorporating the right technology to aid employeesserve customers’ needs and for customers to access needed services;creating high performance customers by enhancing their role clarity,

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motivation and ability; and by encouraging “customer citizenship”-creating fora for customers to assist and educate other customers –Tax, Colgate & Bowen (2006).

Relationship marketing programmes of firms should target at buildinga creative organization that is market and customer driven ratherthan services or sales. Hence banks and their management should becreative and innovative and be able to differentiate their servicesin terms of speed of delivery, convenience and compatibility withcustomers’ characteristic base, assembling of tools, process, skillsand measures that aid the generation of more and better ideas thancompetitors-Chon (2006). Efforts should also be made to de-emphasizerisk evasiveness, excessive protectiveness of existing markets andphysical resources as well as stressing efficiency ratherinnovativeness- Barness & Clark (2006).

7. Conclusion: Relationship marketing may remain elusive as a marketing practice andphilosophy in the banking industry in Nigeria in the absence of policiesthat spur up competition in the industry. Competition will expand themarket and challenge corporate ownership and management to internalmarketing practices as bases for interactive and holistic marketing asroad map to relationship marketing.

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