Effects of Marketing Strategy on Banks’ Performance
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Date
2022-06-18
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A.A.U.
Abstract
Ethiopian commercial banks’ marketing strategies and mixes have certain deficiencies, and their marketing practices have not grown fully. Despite these, there are inadequate researches that have so far been conducted on the industry’s marketing activities, especially in relation to the effect of banks’ marketing strategy upon their financial as well as market share performances. As a result of this, this research, which is mixed methods research and based on pragmatic worldview, has been conducted to achieve three main purposes: To establish the causes of these deficiencies, to determine the relationship that exists between marketing strategy and banks’ performance, and to establish the mediating role of customer satisfaction in this relationship. To achieve these purposes, a research model that shows the relationships that exist between the research variables was developed on the basis of the literature's. Then, interview data, which were subsequently analyzed by using thematic analysis method, were collected from the banks’ marketing managers - who were selected through quota sampling technique. On top of this, survey data were gathered from a sample of two hundred and thirty eight bankers (who were selected by using simple random sampling technique) by using an instrument that its validity and reliability were established through statistical method. Finally, descriptive, correlation, and regression analyses of these data were conducted by using SPSS v25; Sobel test method was used to test the statistical significance of the mediated effect of banks’ marketing strategy upon their performance; and, bootstrapping method was used to test the hypotheses. Accordingly, the results of qualitative analysis show that the infancy of the country’s financial and banking systems, failure on the part the country’s financial regulatory body in issuing legal instruments, lack of adequate banking infrastructure which banks often cite for their system interruption or delay, failure on the part of the banks in taking more proactive steps, lack of originality when it comes to marketing strategy formulation, and undergrowth of the country’s marketing practices are the main reasons for the inadequacies of Ethiopian commercial banks’ marketing strategies and mixes. In addition to these, the results of quantitative analyses confirm that banks’ marketing strategies (which are represented by product, pricing, communication, distribution, customer relationship, and sustainable marketing strategies) have statistically significant direct and indirect effects upon banks’ performances; customer satisfaction has statistically significant direct effect upon banks’ performance when banks’ marketing strategies are included in the models as another predictors of the outcome variable; and, the indirect or mediated effects are partial mediation only. Therefore, these findings enable complete understanding of the research topic as they provide objective, convincing, and full evidence that shows the effects that marketing strategy has upon banks’ financial and market share performances; they help the country’s bank managers to understand the important relationships that exist between banks’ marketing strategies, banks customers’ satisfaction, and banks’ performances; and, they make very important contribution to the literature as they fill the research gap by providing full answers to some of the incomplete, inconsistent, inadequate, or contradictory findings that were highlighted in the literature.
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Product, price, place, promotion, customer relationship, and sustainability