INSTITUTE OF PUBLIC ADMINISTRATION AND MANAGEMENT

(IPAM)

UNIVERSITY OF SIERRA LEONE (USL)

TOPIC:

THE IMPACT OF MARKETING STRATEGY ON PROFITABILITY IN

THE PRIVATE SECTOR

CASE STUDY

GUARANTY TRUST BANK (SL) LIMITED

DEPARTMENT: ACCOUNTANCY

STUDENT NAMES: IDENTIFICATION NUMBER

SALLIEU MOHAMED SHERIFF 20800

MISHAEL FRANKLENE TURAY 19130

ABU BAKARR BAH 19081

MOHAMED DAUDA KAMARA 18964

IBRAHIM KORAY SUMAH 19531

SUPERVISOR: MR. SHEKU ANSUMANA NUNI

DECEMBER 2020

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The Impact of Marketing Strategy of Profitability in the Private Sector – Case
Study: Guaranty Trust Bank (SL) Limited

Submitted to:

The Department of Accountancy, Institute of Public Administration and Management (IPAM),

University of Sierra Leone (USL), in Partial Fulfillment for the Degree of Bachelor science in
Applied Accounting (Honours).

Faculty: Management Science

Course: Bsc. Honours in Applied Accounting

Submitted by: Sallieu Mohamed Sheriff 20800

Mishael Franklene Turay 19130

Abu Bakarr Bah 19081

Mohamed Dauda Kamara 18964

Ibrahim Koray Sumah 19531

Supervisor: Mr Sheku Ansumana Nuni

Institution: Institute of Public Administration and Management (IPAM) - USL

DECEMBER 2020

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 DECLARATION

We hereby declare that this Project Writing entitled “The Impact of Marketing Strategy on
Profitability in the Private Sector in the case study Guaranty Trust Bank S/L Ltd” is a
research done under the supervision of our Supervisor and results obtained were done by us. It is
original and does not contain research results that have been published or written by others, nor
are they used to obtain degrees or certificates from the Institute of Public Administration and
Management or other educational Institutions, except where specifically marked and appreciated
in the text material.

Authors:

Sallieu Mohamed Sherriff

Name Signature Date

Mishael Franklene Turay

Name Signature Date

Abu Bakarr Bah

Name Signature Date

Mohamed Dauda Kamara

Name Signature Date

Ibrahim Koray Suma

Name Signature Date

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 CERTIFICATION

This is to certify that the above names in the Department of Accountancy, B.Sc. (hons.) in
Applied Accounting, of the Institute of Public Administration and Management: University of
Sierra Leone, undertook this dissertation work under my supervision. I also confirm that this
work is their original production, except where references where made to other researchers work.

Supervisor’s name Signature & Date

Mr. Shekou Ansumana Nuni -------------------------

Head of Department Signature & Date

Mr. Lawrence Knox Goba ---------------------------

External Examiners Signature & Date

--------------------------

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v
 DEDICATION
We dedicate this research work to our parents, lecturers, and friends and loved ones for their
utmost and steadfast support towards the completion of our course.

i
iii
 ACKNOWLEDGEMENT

To start with, we give thanks to the Almighty God for his divine favor and inspiration given to us
throughout the conduct of this research exercise. And to our loved ones for their lending support
to us during this stressful period, without their love, enormous support and patience, it would
have been difficult for us to complete this work.

Our sincere and profound gratitude also goes to our supervisor, Mr. Shekou Ansumana Nuni for
his guidance, encouragement and constructive criticism which has immensely contributed to the
success of this research work. Our special appreciation goes to our academic fathers, Co-
Supervisors, heads of departments, head of student affairs unit and to all lecturers at IPAM-USL,
in the department of Accountancy for their excellent and immense contribution to the success of
this work.

We are also indebted to all those who in their own ways made sacrifices in all aspect especially
our dear parents and guidance for their spiritual, mental, physical, moral and financial support
they offered us during the course of this study.

Our most sincere and special thanks goes to the entire management and staff of Guaranty Trust
Bank SL Ltd especially the managing director Mr. Ade Adebiyi, the head of the marketing
department (Cooperate) Mrs. Boblinda Caulker and (Retail East) Mrs. Emile Barbor, the staff in
the marketing department for their pivotal role they played throughout the course of the research
work. Your frantic effort is greatly acknowledge.

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 Table of contents

Declaration ………………………………………………………………………………. i

Certification ……………………………………………………………………………… ii

Acknowledgement ………………………………………………………………………. iii

Table of contents ………………………………………………………………………... iv

List of tables …………………………………………………………………………..… ix

List of figures …………………………………………………………………………... x

Acronyms/Abbreviation ……………………………………………………………..… xi

Abstract …………………………………………………………….………………….. xii

CHAPTER ONE ………………………………………………………………………… 1

Introduction ……………………………………………………………………………. 1

1.0 Introduction ………………………………………………………………………… 1

1.1 Background to the study ……………………………………..…………………….. 2

1.2 Problem statement ……………………………….………………………………… 3

1.3 Aims and Objectives of the study ………………………………..……………….... 4

1.3.1 Aims ……………………………………………………………………………... 4

1.3.2 Objectives of the study ………………………………………………………….. 4

1.4 Research question ………………………………………...……………………...... 5

1.5 Significance of the study ……………………………………….………………..... 5

1.6 Hypothesis ………………………………...………………………………………. 5

1.7 Scope and Methodology ……………………………………….…………………. 6

1.8 Delimitation of the Study ………………………………………………………… 6

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1.9 Key terms ………………………………..……………………………………... 7

1.10 Organization structure ……………………………………….……………….. 7

CHAPTER TWO ………………………………………………………………..… 8

Literature Review …………………………….………………………………..… 8

2.0 Introduction …………………………………..……………………………...... 8

2.1 Historical Background ………………………………………..……………..... 8

2.2 The banking profitability ………………………………………….………...... 9

2.2.1 Introduction to banking profitability …………………………...................... 9

2.2.2 How profitability is achieved through marketing …………….…………..... 10

2.2.3 Profitability measures in the banking sector …………………..................... 10

2.3 Meaning of marketing ….................................................................................. 11

2.3.1 Bank marketing …………………………………….……………..….….… 11

2.3.2 Importance of marketing in the banking sector ……………………............ 11

2.4 Marketing strategies …………………………...……………………………. 12

2.4.1 An overview of marketing ……………………………….…………..…… 12

2.4.2 Definition of marketing strategies …………………………....................... 12

2.4.3 Development of marketing strategy ………………………….................... 13

2.4.4 Marketing approach to banking services ………………...…………..…… 14

2.4.5 Marketing strategies in banks ……………………………………...……... 15

2.5 Elements of marketing ………………………………….………………….. 16

2.5.1 Product …………………………………………………………………… 16

2.5.2 Price ……………………………………………………………………… 16

2.5.3 Promotion …………………………………………………………..…..... 17

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2.5.4 Placement …………………………………………………………..…... 17

2.5.5 People …………………………………………………………......……. 17

2.5.6 Process …………………………………………………………...…...... 18

2.5.7 Physical evidence ………………………………………………….…… 18

2.6 Promotion or marketing communication ……………………………..….. 18

2.7 Definitions of marketing communication ………………………………... 19

2.7.1 The following are the definitions of communication …..…..………….. 20

2.7.2 The above definitions indicate the following

characteristics ……………………………………………………...… 20

2.8 Communication process ………………………………………………….. 21

2.8.1 Elements of communication process ………………………………...… 21

2.8.2 Importance of effective communication …………………….................. 22

2.8.3 Benefits of marketing communication …………...………….……….... 24

CHAPTER THREE ………………………….…………………………...….. 26

Research methodology ………………………………………….……….…. 26

3.0 Introduction …………………………………………………………..….. 26

3.1 Research design ……………………………………………………..….... 26

3.2 Population and sample …………………………………….……….…..... 26

3.2.1 Population ………………………………………..……………………. 26

3.2.2 Sample ……………………………………...…………………............. 27

3.3 Research instrument …………………………………………..……..….. 27

3.3.1 Questionnaires or primary research …………………………………... 28

3.3.2 Desk or secondary research …………………..…………………......... 28

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3.4 Ethical consideration ………………...…………………………………... 29

3.5 Method of data collection ……………………………….……………….. 29

3.6 Method of data analysis …………………………………….……………. 30

3.7 Summary ……………………………..…………………………………... 30

CHAPTER FOUR …………………………………..………………………... 31

Data presentation, Result and Discussion ………………………………… 31

4.0 Introduction ……………………………………………………………… 31

4.1 GT Bank’s generic strategies ……………………………………………. 31

4.1.1 Cost leadership strategy ………………………………………………. 31

4.1.2 Differentiation strategy ………………………………………………. 32

4.1.3 Focus strategy ……………………………………………………….... 33

4.2 Demographic analysis of response rate ………………………………… 33

4.2.1 Demographic characteristics of respondents …………………............ 33

4.2.2 Graphical presentation of demographic

characteristics of customer ………………………………………… 36

4.3 Marketing strategies …………………………………………………… 38

4.4 Analysis of questionnaire ………………………………………...……. 39

4.4.1 Presentation of question one from respondents

and audited income statement ……………………………………... 39

4.4.2 Presentation of question two from respondents ……………............... 41

4.4.3 Presentation of question three from respondents …………………… 42

4.4.4 Presentation of question four from respondents ……………............. 43

4.4.5 Presentation of question five from respondents ……………............. 44

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4.5 Discussion of findings …………………………………………………..…. 44

4.6 Limitation of the study …………………………………………………..… 45

4.7 Chapter summary ……………………………………………………….…. 45

CHAPTER FIVE ……………………………………………………………… 46

Summary, Conclusion and recommendations ……………………………... 46

5.0 Introduction ……………………………………………………………….. 46

5.1 Summary of findings and recommendation …………………………......... 46

5.1.1 Objective 1………………………………………………………………. 46

5.1.2 Objective 2 ……………………………………………………................ 47

5.1.3 Objective 3 ……………………………………………………................ 48

5.1.4 Objective 4 ……………………………………………………............... 48

5.1.5 Objective 5 ……………………………………………………............... 49

5.2 Conclusion ……………………………………………………………….. 50

5.3 Recommendations ………………………………………………………... 50

Reference …………………………………………………………………………...... 52

Appendix ………………………………………………………………….…. 54

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 List of tables

Table 4.2.1 Demographic characteristics of staff …………………………………………… 34

Table 4.2.2 Demographic characteristics of customers ……………………………………... 35

Table 4.4.1 Presentation of question one from respondents ………………………………... 39

Table 4.4.1.1 Presentation of group statement of profit and loss account

of GT Bank S/L Ltd
…………………………………………………………. 39

Table 4.4.2 Presentation of question two from respondents ………………………………… 41

Table 4.4.3 Presentation of question three from respondents ……………………………….. 42

Table 4.4.4 Presentation of question four from respondents ……………………………….... 43

Table 4.4.5 Presentation of question five from respondents ………………………………… 44

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 List of figures

Figure 4.2.1 Showing a graphical presentation of demographical

characteristics of staff
……………………………………………………….. 35

Figure 4.2.2.1 Showing gender of respondents (customers) ………………………………... 36

Figure 4.2.2.2 Showing age of respondents (customers) …………………………………… 37

Figure 4.2.2.3 Showing educational qualification of respondents (customers) …………….. 37

Figure 4.2.2.4 Showing occupation of respondents (customers) ………………………….... 38

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 Acronyms / Abbreviation

GTB – Guaranty Trust Bank

PIMS – Profit Impact of Marketing Strategy

ROA – Return on Asset

ROE – Return on Equity

LPG – Liberalization, Privatization and Globalization

4Ps – Product, Price, Promotion and Placement

ATM – Access Transfer Money

S/L – Sierra Leone

EFT – Electronic Fund Transfer

TQM – Total Quality Management

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 ABSTRACT

This research paper examine the impact of marketing strategy on the profitability in the private
sector, specifically in the banking sector using a case study Guaranty Trust Bank S/L limited. .
The research was conducted on employees and customers to see whether marketing strategy
programs are develop to deliver superior quality service to their customers, how customers view
the service that they receive from the bank and its subsequent effect on profitability. Data were
collected from primary and secondary sources using a survey research design method through
questionnaires issued to fifty (50) respondents. The instrument used in this study is a close-ended
questionnaire. Tables through Microsoft excel were used to analyze the data. The research
revealed that marketing strategies (like service improvement, sales promotion techniques and
products design) have a positive relation (effect) on the profitability of GT Bank; it also revealed
that GT Bank was marketing oriented and were practicing marketing strategy very well.
Subsequently, recommendations were made to GT Bank S/L ltd to encourage staff to a level of
commitment for improve quality service, work on more marketing relations, consistently
meeting and exceeding customer’s expectations, accelerate business improvements and also
focus on moral aspect besides profitability.

Keywords: Marketing strategy, profitability, service improvement, promotion, products and

Guaranty Trust Bank.

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 CHAPTER ONE (1)

INTRODUCTION

1.0 Introduction

In a competitive market or not, every successful marketing strategy must have the ability to
tell an organization where they would want to be on a long-term basis. As a result, this leads
marketing strategy as a continuous process. Organization sees marketing strategy as the
marketing tool by which the business will hope to achieve its marketing goals. Every business
organization, ensures there is safely no activity where the marketer must not therefore make the
right decision about the four components of marketing, which are the marketing mix sometimes
called the four traditional P’s - price, product, place/distribution and promotion through the
employment of marketing strategy. These four components are very essential and must be
coordinated and moved into an integrated and effective strategy if the product must perform well
in the market. It consists of specific strategies for target markets, marketing mix and marketing
budget. Marketing strategy has become a relevant tool in the world for any organization to
remain in the competitive market environment and become stronger.
According to Li and Calantone, 2000, he stated that there are varied definitions of marketing
strategy and such definitions reflect numerous perspectives. However, the agreement is that
marketing strategy provides the avenue for making use of the resources of an organization in
order to ascertain its set goals and objectives.
Marketing strategy is defined as a given market area, the proper distribution of resources to
support enterprises to win competitive advantage. Goi (2005) defined marketing strategy as a set
of marketing tools that firms utilize to pursue their marketing objectives in the target market; the
view which was earlier expressed by (Gronroos, 1999 and Osuagwu, 2006). Therefore, the
function of marketing strategy is to establish the nature, strength, direction, and interaction
between the marketing mix- elements and the environmental factors in a specific situation.
According to (Owomoyela, et al, 2013), the purpose of the development of an organization's
marketing strategy development is to create, build, defend and maintain its competitive
advantage. Managerial judgment is very important in keeping up with environmental ambiguity
and uncertainty in strategic marketing.

1
 As competition among organizations seeking the patronage of customers has increased ways
business managers can compete more effectively. A managerial orientation looks at production
philosophy as sales promotion, and marketing philosophy as customer satisfaction. The selling
concept takes an inside out with a short-term view, since it starts with its own factory and
existing products. In contrast, the marketing concept takes an outside in perspective. “Peters
wrote, make champions of change in support of the customer, not guardians of internal stability,
the new corporate heroes in every function. Today the marketing philosophy is adhered to most
of the world’s leading business and by an ever-growing number of non-profit organizations (e.g.
government departments, charities, political parties, sporting associations etc.) where managers
recognize the value of applying marketing techniques to the attainment of their goals.
Many profit-making organizations in the world engage in providing more than one service
to its customers. The organizations identify gaps, which must be filled in order to meet
customers’ needs and endeavor to fill these gaps by offering a range of services to them. They
identify weakness in the market segment that are emerging, neglected or poorly served by
competitors after which they select a strategy using marketing mix as the resources. Any
organization that wants to be successful in doing business needs to concentrate its resources on
greatest opportunities to increase sales and achieve a sustainable competitive advantage. This is
true of services organization. Marketing strategies therefore, is a long-term response to the
changing environment and involves fundamental decision about how to match resources to that
changing environment. Profit impact of marketing strategy (PIMS) is an ongoing study of
strategies that drive business profitability, cash flows, and revenues and help companies gaining
and sustaining competitive advantage in the industry.

1.1 Background to the Study

Marketing and promotional strategies for profitability in the banking industry may be differ
from other industry depending on the uniqueness of situation. Strategies based on market
dominance - In this scheme, firms are classified based on their market share or dominance of an
industry. Typically, there are four types of market dominance strategies: Leader, challenger,
follower, and the nicher.
Generically, organizations that must survive the odd path must put necessary business
marketing strategies and plans of actions in place to enable it make ends meet, break even and

2
equally make business profits. According to Curry (1999), marketers who fail to conduct
thorough marketing strategy and marketing research works run the risk of not achieving their
marketing promotional goals and objectives. Catterall, (1988), notes that some marketing
executives consider academic research as irrelevant to their marketing problems, while
academics complain that marketing executives ignore their marketing research efforts marketing
plan and marketing research is real, vital and costly process, without which marketing
management decisions would be made. According to mechanically Osuagwu, (2002). Marketing
promotional strategy is a very indispensable tool in marketing decisions and strategy
formulation. Developing a very useful marketing plan would however depend on having a sound
and reliable information data on the business/organization/company and on the market, the
uncontrollable factors and these elements that make up the marketing mix in the banking
industry.
Marketing as a subject and organisational term has evolved over time. It has become
ostensible that marketing is crucial for the improvement of business but however, there seems to
be confusion on the extent to which marketing helps organisations improve profitability. The
quest for profitability that is contributed by marketing and more precisely marketing strategies
need a diversified research in both modern and inferior economies, and this points to both the
developed and underdeveloped economies.
Profits in the modern world seem to be connected with marketing strategies. In this regard,
some studies have found that profitability increased due to the marketing strategies employed
than the effect of price, quality and place (Norman, 2010; Rust et al. 2002). In addition, some
studies indicate that marketing is a stimulating factor to ensure customers patronage with
businesses. Marketing strategy is a method by which a firm attempt to reach its target markets.
In this context, the study intents to find out through both interviews and documentary review
through a case study of GUARANTY TRUST BANK SIERRA LEONE LTD the extent to
which marketing strategy impact profitability (either favourably or adversely).

1.2Problem Statement

Businesses within the banking industry in Sierra Leone is highly competitive as compare to
others. This business environment is opened to all types and forms of business operators and as
well as age, status ability. For this industry cannot survive without satisfying their numerous
customers. Customer satisfaction is at the pivot of every business because their survival lies on
3
the patronage they receive from their customers and clients. Thus, the essence of developing a
marketing strategy for a company is to ensure that the company`s capabilities are matched to the
competitive market environment in which it operates, not just for today but in to the foreseeable
future. For a commercial organization, this means ensuring that its resources and capabilities
match the needs and requirement of the market in which it operate. It is however important to
note that no matter how wonderfully crafted and articulated the strategy, if it is not focused on
meeting the needs of customers it is doomed to be a failure.
It is natural that every business organization whether small or large, private or government,
domestic or international operate in a turbulent and uncertain environment. Managers are
uncomfortable with changing customer expectations, technological discontinuities, and increase
environmental uncertainties. Thus, making the right strategic choice and setting strategic
priorities for the allocation of resources to different function in an efficient manner for business
success have been very challenging. Due to this, managers must develop new tools, new
concepts, and new strategy (marketing strategy) to meet those needs.
Banking industry faced with some problems while implementing the marketing mix strategy
with respect to organizations’ profitability. Marketing in banking institution is all about financial
security, which cuts across all levels of business transaction regardless of location.

1.3 Aims and Objectives of the Study

1.3.1 Aims

The Aim of this study is to examine or evaluate the impact of marketing strategy on the
profitability of an organization using Guarantee Trust Bank (GTB) as a case study.

1.3.2 Objectives of the study

The specific objectives of the study are:

1) To determine the relationship between marketing strategies and banking profitability

2) To determine the relationship between marketing strategies and service improvement

3) To identify the difference between banks profitability and marketing strategies

4) To evaluate the effect of sales promotion techniques on the consumer buying behavior
4
To examine whether effective marketing promotion plan is more of negative or positive impacts
on a company's profitability

5) To identify the extent to which product design affects the profitability of a company

1.4 Research Question

Based on the above stated objectives, the following research questions have been raised to
guide the study:

1) What is the relationship between marketing strategies and the profitability of Guarantee Trust
Bank?

2) What is the relationship between marketing strategies and the service improvement of
Guarantee Trust Bank?

3) What is the difference between banks profitability and their marketing strategies?

4) What is the effect of sales promotion techniques on the customer buying behavior?

5) To what extent do product design affect the profitability of a company?

1.5 Significance of the Study

This study is expected to be of significant importance to entrepreneurs as it was design to

guide them in the development of effective marketing strategies that will enable them succeed in
the long term.

To the management of Guarantee Trust Bank, this study is an exposition on their marketing
strategies and may bring to barely identify the possible flaws in such strategy which could in the
end guide them in the development of policies aimed at curtailing the effect arising from the
flaws.

The study is also of great importance to academicians in strategic management who may use
this research as a good basis for further research.

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1.6 Hypothesis

The following research hypothesis have been formulated in their Alternative (H1) and Null
(Ho) form to be tested in the course of this study so as to provide answers to the research
questions raised above.

1) H1: There is significant relationship between marketing strategies and banking profitability

H0: There is no significant relationship between marketing strategies and banking profitability

2) H1: There is significant relationship between marketing strategies and service Improvement

H0: There is no significant relationship between marketing strategies and service

Improvement

3) H1: There is clear difference between bank`s profitability and marketing strategies

H0: There is no clear difference between bank`s profitability and marketing strategies

4) H1: Sale promotion techniques are managed in the customer buying behavior

H0: Sale promotion techniques are not effectively managed in the customer buying behavior

5) H1: Product design does affect the profitability of a company

H0: Product design does not affect the profitability of a company

1.7 Scope and Methodology

The study researched in to the marketing strategies and their impact on banking profitability
as well as their Impact on the customer`s profitability. Also, the study considered the marketing
strategy which gives detail explanation in the area of: Advertising, publicity, sales promotion,
personal selling and public relation.

Data was collected personal interviews and self – administered questionnaires. Information
on literature review relating to marketing strategies was obtained from textbooks, manuals,
website and other publications.

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1.8 Delimitation of the Study

Delimitations are controlled boundary conditions for theory (Ody-Brasier & Vermeulen, 2014).

In the course of carrying out this research, the researchers faced a lot of problem among which:

 Financial constraints, shortage of time and consultation, due to these problems, the study
is limited to Guarantee Trust Bank of Sierra Leone.
 It was very difficult to collect the data from the firm, for instance what strategy they are
using in order to be profitable. Since some of the information are very confidential
towards the company’s success, the researchers were unable to retrieve, ascertained and
gain access to most of these information.
 Some of the members of the sample were not reach as a result of their frequent traveling
and busy schedules.
 The sample used in the research through representative, but it is relatively small
compared to the population, as a result of lack of adequate financial resources with which
to carry out the research on a greater sample.

1.9 Key Terms

1) Marketing strategy: This is a technique which is used to develop the demand for the product
which the company is producing or services they are rendering to the public

2) Monetary policy: This is a financial technique which bank of Sierra Leone uses as an
instrument of controlling the financial situation of the nation

3) Banking Services: These are the services that banks are rendering to the general public some
of which are: Custodian of customer`s deposit and other valuable materials, financial advisory
and so on.

1.10 Organization Structure

The entire project will be organized and compiled into five different chapters. These are:

Chapter 2 Reviews literature concerning the project.

Chapter 3 Research methodology presents the different methods of data collection and data
analysis.
7
Chapter 4 Results and discussion, Results, Results from the literature review, Discussion of the
results.

Chapter 5 Presents the summary of findings, limitation of the study, conclusions,

recommendations and suggestions for further study.

CHAPTER TWO (2)

LITERATURE REVIEW

2.0 Introduction

A marketing strategy combines product development, promotion, distribution, pricing,

relationship management and other elements; identifies the firm's marketing goals, and explains
how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the
choice of target market segments, positioning, marketing mix, and allocation of resources. It is
most effective when it is an integral component of overall firm strategy, defining how the
organization will successfully engage customers, prospects, and competitors in the market arena
of corporate strategies, corporate missions, and corporate goals. As the customer constitutes the
source of a company's revenue, marketing strategy is closely linked with sales. As per the
research conducted by TIebbar (1988) studied marketing strategies of banks aimed at inculcating
the habit of thrift among the people. The suggestion is that keeping the rural branches open on
Sundays can augment savings. Direct marketing is also suggested to reduce waiting time
exponentially and enhance customer satisfaction. Erratic behavior of the employees, suspicious
looks of the staff, vague knowledge of the products, undynamic promotional methods etc., may
hamper the banking business in rural areas.

2.1 Historical Background

The need for an equilibrium between demand market and supply market (producer and
consumer) has necessitate the development of marketing in business. The business environment
has become a war zone whereby every company is trying to do something to succeed and remain
in business. In view of this has arisen the need to employ strategy in a business to give it a

8
competitive edge in order for it to compete effectively and be a force to reckon with. By
definition, according to Johnson Scholes (1988) strategy is considered as the matching of the
activities of an organization to the environment in which it operates and to its own resource
capabilities. Kotler (2005) refers to marketing as an organizational functional and a set of
process for creating, communicating, and delivering value to customers and for managing
customer relationship in ways that benefit the organization and its stakeholders.

Markets were formally focusing on just selling products and neglecting services which are
intangible in nature. Service marketing has to be seen in four perspectives, services industries
and company, service as a product, customer service and derived service. In the past only
physical product and core services were marketed. In the book of Kotler and Keller ‘Marketing
Management Analysis, Planning, Implementation and Control 8th Edition’ it mentioned service
as any act or performance one party can offer to another party that is essentially intangible and
does not result in the ownership of anything, its production may or may not be tied to physical
product. Hence, according to Clarke et al (1998) financial institutions see or consider marketing
moves in a strategic light. Marketing therefore, play a significant role in corporate strategies. In
the banking sector strategic marketing is a very key area to improve profitability, at this stage it
enables the banks to understand and respond to the investment nature of behaviour of their
customers using such strategies as segmentation (Jagersma, 2003).

The essence of development a marketing strategy for a company is to ensure that the
company’s capabilities are matched to the competitive market environment in which it operates,
not just for today but into the foreseeable future. For a commercial organization such as
Guaranty Trust Bank, this means ensuring that it resources and capabilities match the needs and
requirements of customers (the market conditions in which it is implemented), and to the
resources and capabilities of the firm seeking to implement it. No matter how wonderfully
crafted and articulated the strategy, if it is not focus on meeting the needs of customers, it is
doomed to be a failure.

2.2 The Banking Profitability

2.2.1 Introduction to Banking Profitability

According to Mckinsey Global Banking Annual Review 2016, regulation will continue to affect
bank’s profits by: 1st) Increasing operating costs, derived from implementation of new
9
regulatory obligations, new reporting and model requirements and more rules on compliance;
2nd) New rules imposing additional capital requirements beyond the levels set by current Basel
III targets to be implemented by 2019. At the same time, some banks have informed publicly that
their expenses on regulatory issues were well over $1 billion annually between 2010 and 2015,
while many increased their core capital ratios due to Basel III implementation. It is
unquestionable that the recent financial crisis has put a lot of pressure on regulation.

Profit is the very reason for the continued existence of every commercial organization. The
rate of profitability and volume of profits are therefore, rightfully considered as indicators of
efficiency in the deployment of resources of banks. Profitability indicates earning capacity of the
banks. It also portrays work culture and operating efficiency of the bank. Profits and profitability
are, therefore, the nerve and knot of a business. Lord J.M. Keynes remarked “Profit is the engine
that drives the business enterprise”. The profit earned by an organization over the years is a
barometer reflecting organizational performance.

2.2.2 How Profitability is achieved through Marketing

The continuous use of marketing will increase profitability and growth by the executive through
the assessment of market research and customer dynamics (Groenewald, prinsloo, & pelser,
2014). Marketing strategies should include quick product launches, and they must be able to
identify new market proportions and see the need to pursue and drive customers, and
successfully drive profit (Swenso et al., 2012). Sales promotions foster profitability either in a
short-run or long-run (Zebra, syeda, malik, batul, & syeda, 2012). The attention and loyalty that
consumers or customer displays, contribute immensely to business profitability (Agarwal et al.,
2012). The implementation of combining and promoting advertising strategies in order to
enhance profitability. (Kumar et al., 2013, Magnusson et al., 2013).

2.2.3 Profitability Measures in the Banking Sector

Profitability measures the financial performance of a bank over a period of time, usually one
year, as a result of the decisions made regarding the use of all resources in the institution (Knight
and Roth, 2013). When evaluating a bank’s performance however, “due consideration needs to
be given to not only its financial condition. Thus, the management of profitability and risks is
closely related, because risk taking is a necessary condition of future profitability” (Bessis,
1998:16). Each bank makes trade- offs between the profitability level it striving to achieve and

10
the risks it is willing to take. Therefore, profitability measure, take alone without a proper
assessment to a bank`s risk, can be misleading.

Banks profitability is typically measured by the return on assets (ROA) and or the return on
equity (ROE) is usually expressed as a function of internal and external determinants
(Athanasoglou, 2016). Internal determinants are factors that are mainly influenced by a bank`s
management decisions and policy objectives such as the level of liquidity, provisioning policy,
capital adequacy, expense management and bank size (Athanasoglou, 2016). On the other hand,
the external determinants, both industry-related and macro-economic, are variables that reflect
the economic and legal environment where the banking institution operate.

2.3 Meaning of Marketing

Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering and exchanging offerings that have values for customers, clients, partners and society
at large.

2.3.1 Bank Marketing

Bank marketing is defined as “aggregate of functions, directed at providing services to satisfy

customers’ financial (and other related) needs and wants, more effectively and efficiently than
the competitors keeping in view the organizational objectives of the bank.” (Philip Kotler)

Thus, without exception each individual working in the bank is a marketing person who
contributes to the total satisfaction to customers and the bank should ultimately develop
customer orientation among all the personnel of the bank.

2.3.2 Importance of Marketing in the Banking Sector

Marketing to banking is an appropriate promise to a customer through a range of services
(products) and also to ensure effective delivery through satisfaction. The actual satisfaction
delivered to a customer depends upon how the customer is interacted with.

Due to the introduction of LPG policy and IT Act of 2000 the scope of the market has
enhanced. Customers’ expectation is high from the service industry like a banking industry. Only
those banks will survive who will provide efficient and customer desired services.

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 The various factors which have led to the increasing importance of marketing in the banking
sector are categorized as follows:

 Increase awareness among customers

Modern technology has made customers aware of the developments in the economic
environment, including the financial system. Financial needs of the customers have grown multi
fold into various forms like quick cash accessibility, money transfer, asset security, increase
return on surplus funds, financial advice, deferred payments etc.

 Greater focus to service quality

Quality is the watchword in the competitive world, which is market driven and banks have had to
face up this emerging scenario. In fact, it may not be exaggerating to say that quality will be the
sole determinant of successful banking ventures in future and marketing has to focus on this
most crucial need of the hour.

 Greater adoption of technology

Greater adoption of technology has resulted in financial product development especially in the
international and investment banking areas. The western experience has demonstrated that
technology has not only made execution of work faster but has also resulted in greater
availability of manpower for customer contact

 Reducing importance of intermediating role of banks (Disintermediation)

The increasing role of capital markets in mobilizing funds is reducing the importance of banks as
intermediaries. Companies are directly approaching the servers through the capital markets.
Mutual funds help in attracting the small investors who do not want to take much risk.

2.4 Marketing Strategies

2.4.1 An Overview of Marketing Strategy

Marketing strategy is a broad plan for achieving marketing objectives. A marketing strategy that
is well-articulated will enable one to focus on marketing activities to achieve the organizational
goal.

2.4.2 Definitions of Marketing Strategy

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  By Philip Kotler, “Marketing strategy is the marketing logic by which the business unit
expects to achieve its marketing objectives.”
 By Dibb and Simkin, “Marketing strategy indicates the specific markets towards which
activities are to be targeted and the types of competitive advantage to be exploited.”
 By Piercy, “Choosing market targets and a strong market position base on differentiating
capabilities to create a robust and sustainable value proposition to customers and
networks of critical relationships.”
Thus from the above definitions one can assert that a marketing strategy is a process that can
allow an organization to concentrate its limited resources on the greatest opportunities to
increase sales and achieve a sustainable competitive advantage.

A marketing strategy should be centered on the key concept that customer satisfaction is the
main goal. Fulfilment of wants of the prospects is one of the important goals of marketing
activities. A prospective buyer is known as a prospect.

A marketing strategy is a process that can allow an organization to concentrate its limited
resource upon the greatest opportunities to increase sales and achieve a sustainable competitive
advantage. The primary focus of the marketing strategy is to effectively allocate and coordinate
marketing resources and activities to accomplish the firm’s objectives within a specified market.

2.4.3 Development of Marketing Strategy

The development of a marketing strategy involves the isolation of a target market segment, a set
of clear-cut goals, a fair amount of consumer research, and the implementation of initiatives
aimed at getting the word out. Clear-cut goals are an essential part of marketing strategy
development. Effective marketing starts with a considered well-informed marketing strategy. A
good marketing strategy helps in defining the vision mission and business goals. The marketing
strategy should be well planned and developed in consultation with the team involved. It is a
wide reaching and comprehensive strategic planning tool that are:

 Describe the business and its products and services

 Explains the position and role of the products and services in the market
 Profile the customers and competition
 Identifies the marketing tactics that will be used.
 Allow building marketing plan and measuring its effectiveness.
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  Increasing awareness of the products and services in the market
 Selling more products in the segmented market
 Reaching out to new customer segment

2.4.4 Marketing Approach to Banking Services

Marketing of banking services is a device to maintain commercial viability and an approach
to market the services profitably. It is a managerial approach to excel competition. The
marketing approach in banking services consists of the following elements:

 To understand customer’s financial needs

Understanding customers and customer’s needs and requirements is the guiding philosophy of
marketing. A marketing orientation requires the organization to view its business from the point
of view of its customers. This requires an insight into customer psychology and behavior,
including what motivates customers, their attitude and perceptions of the bank and its products as
well as an understanding of their decision processes.

 To develop suitable banking products and services to meet customer requirement

The product is usually the basis on which customer satisfaction is created. As such it is vital
component of the marketing mix. The financial institutions specifically banks have become
increasingly concerned with a number of issues surrounding product strategy, including, the
process and procedure involved the product development, the factors to be considered for the
successful adoption of new product; how to manage the product over its life, to protect it from
completion; how to differentiate the product from similar alternatives; when to withdraw an
unprofitable product from the range; and how best to implement the withdrawal process with
minimal adverse effects for the bank as well as customers.

 To fix the fair and competitive prices for the products or services developed
The price of a financial product may be the interest rate on loan, a fee charged for advice given,
commission paid to an intermediary such as a broker, the tax paid on interest earned on saving
etc.
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  Promoting the products through advertisement to present and potential customers
Through advertisement the bank is informing, persuading and educating individual and groups to
enable acquisition of new customers, retention of existing customers, project the company image
and improve employee morale.

 To set up suitable distribution channels and bank branches

Distribution involves a wide variety of activities culminating in the creation of three types of
utility: time, place and possession. In terms of time, distribution allows the customer to gain
access to financial service when it is convenient for them to buy. In terms of place, distribution
makes products and services available to customers in locations which are accessible and
convenient to them. With regard to possession, distribution provides the customer with access to
the product for consumption or future use. In addition to this, distribution function also provides
a means of effectively communicating with the customers, and for the customers to communicate
with the banks.

 Conduct market research on an ongoing basis

Research is the key to understand customer expectations and perceptions of service (Kotler
1999). The key task of the bank is not only to create and win more and more customers but also
to retain them through effective customer service. Customers are attracted through promises and
are retained satisfaction of expectations, needs and wants.

2.4.5 Marketing Strategies in Banks

To formulate an effective marketing strategy, the bankers should know the following aspects:

 The total potential presently available and its present share in the total market for
deposits, advances and other services
 Core customer segments i.e. which customers provide highest profit and business
potential, so that they always get the desired attention.
 Core products and services, i.e. which services or products best match the requirements
of customers in general and core customers in particular and provide high business and
profit, so that action is taken to improve such products further to make them more
acceptable.
 What products are supplementary products and keep the core products and services, as
high business and profit potential.

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  Core competitors i.e. which competitors are posing major threat in serving the core
customer segments and which core products and services are they offering to the clients,
so that if possible, bank can explore the possibility of offering similar products or
services.
 Core appeal i.e. which advantage should be offered and communicated to customers in
general to differentiate one’s own organization in terms of pricing, servicing,
conveniences etc.
 Potential products to suit the changing environment, so that they meet the change in
customer’s needs over a period of time
 Potential customers who could be brought to bank’s fold. Potential competitors who may
erode bank’s market share, so that may be taken to change the strategies in time, to
remain the market leader.
 Which other products are needed to be introduced to maintain or enhanced the existing
business, so that customers do not feel the necessity of shifting his patronage elsewhere.
 How strong is the information system in the bank and what needs to be done to create a
prompt and accurate information system which forms core of any marketing exercise?

2.5 Elements of Marketing

Mix Marketing mix is the combination of the elements of marketing and what roles each
element plays in promoting products and services and delivering those products and services to
the customers. The elements of the marketing mix are also referred to as the 5 P's of marketing.
In the beginning. For years together marketers accepted the 4 P's of marketing. The experts have
added the fifth P recently and that is people. Now, there are five P’s of marketing mix. These Ps
are called elements of marketing mix. These are elaborated further in the next paragraph. The
original 4 P's of marketing along with the fifth P added to marketing mix are:

2.5.1 Product:
Product is a combination of tangible and intangible aspects of the products offered by the
manufacturer to the customers. It can be defined as a bundle of satisfaction and dissatisfactions
offered by company to the customers at a point of time. Their physical attributes what they do,
how they differ from your competitors and what benefits they provide. The products can be

16
classified as durable and non-durable, consumers and industrial goods, perishable and non-
perishable, finished and semi-finished etc.

2.5.2 Price:
Price means the monetary value of the product that has been fixed for exchange purpose. The
price is the amount a customer pays for the product. It is fixed after considering various factors
such as market share, competition, material costs, product identity and the customer's perceived
value of the product. The business may increase or decrease the price of product if other stores
have the same product. It is through price the company gets its money back in business. It should
be fixed in such a way the company is in position to recover the costs and earn profits also. If it
is fixed very low, then it may be difficult to come to the breakeven point and if fixed very high
then it may have deterrent effect on the sale. The price decision is very sensitive and for that
special care is to be taken so that you may get the competitive edge due to price decision. Place
(Also referred to as Distribution) – Where your business sells its products or services and how it
gets those products or services to your customers.

2.5.3 Promotion:
The promotion concept is applied for products or services and to the business. The promotion
includes all communications a marketer used in the market for his products or services to create
awareness, persuade the customers to buy and retain in future also. For improvement in the
position of sales or progress of business this method is used. The message is given to target
group regarding the features and benefits of the products or services to the target customers.
Without communication the features, benefits and schemes would not be known to the customers
and objectives of in launching of products or services and increasing sates would not be
completed. When communication creates awareness then only the interest would be created and
customers would take the decision for buying. For promotion different methods of
communication can be used.

2.5.4 Placement
Place represents the point or location where the product is made available to purchase. It is
required that the products and customer should be available at a point then only the sales would
be possible. If not, then the sale does not taken place. This term is used for distribution channel.
It can include any physical store as well as virtual stores on the Internet. Place is not exactly a

17
physical store where it is available Place is nothing but how the product takes place or create
image in the mind of customers. It depends upon the perception of customers. The products or
services should reach to the customer that channel is called distribution channel of placement.
These above-mentioned elements of marketing mix are only for products. With the development
of service sector in every economy, the marketing of services is also needed. Due to this the
elements of marketing mix for service have been extended. The three more elements for service
have been added.

2.5.5 People
The services are being provided with the help of employees and to the customers. There is direct
contact for delivery of the services to the customers. The type of people providing the service
matters a lot from business point of view. The people are to be selected, trained and motivated to
keep the customers very happy. So, the people are very important for service marketing. It is to
be managed effectively.

2.5.6 Process
For availing a service certain activities are to be performed. For that purpose, procedure,
mechanism and flow of activities by which services are delivered are to be decided. Without this
service cannot be delivered properly with uniformity. That would maintain the standard format
for availing the services. This is called process. For example, one wants saving account facility
in a bank then he has to apply for opening an account. After this the pass book, cheque book and
ATM card would be issued and service can be availed after this.

2.5.7 Physical Evidence

There are essential conditions for providing the service. These are two types. One is internal and
another is external. These create the environment in which the service or product is delivered.
For example, to provide the hotel service and external evidence required are building, parking
place, gate and a long drive- way. Internal evidence required like counter, telephone, passbooks,
reservation facilities, cigarettes etc. Without this providing hotel service, a question does not
arise.

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2.6 Promotion or Marketing Communication

Generally, promotion is communicating with the public in an attempt to create awareness and
persuade them toward buying products and/or services. The word promotion is also used
specifically to refer to a particular activity that is intended to promote the business, product or
service. A store might advertise that it's having a big promotion on certain items, for instance, or
a business person may refer to an ad as a promotion. Promotion means a method is used for
getting people to create awareness among people about products or services being offered by the
company. Advertising, public relations, point-of-sale displays, and word-of-mouth promotion are
all traditional ways for promotion. Promotion is the method for providing the link of information
between the seller and prospects of the products or services. The choice of a promotional strategy
will be dependent upon objectives, type of offers, budget, and availability of said promotional
vehicle. The other concept used for promotion is called marketing communication. When any
communication is given in the market with the help of any media is called marketing
communication. Communication is the process of sharing of messages, ideas; information
between two or more parties is called communication. The communication given by the
company relating to the business, products and services in the markets for customers or users
directly or indirectly is called marketing communication. The communication in the market is
given with the help of advertising. Those who use advertising, branding, direct marketing,
packaging, promotion, publicity, sponsorship, public relations, sales, sales promotion and online
marketing are termed marketing communicators or marketing communication managers. The
marketing messages may be with two objectives. First one is to communicate something
regarding their products or services. The objective is to promote their products or services. The
focus is on the products, features, benefits, price, place for purchasing and some comparison with
others. It is different from corporate communication. In corporate communication the focus is on
the company itself. Marketing communications is primarily concerned with demand generation,
product/produce/service positioning while corporate communications deal with issue
management, mergers and acquisitions, litigation etc.

2.7 Definitions of Marketing Communication

Any business organization is a human group constituted for certain specified objectives. The
achievement of these objectives largely depends upon the fact that all human efforts are properly

19
co-ordinate and integrated. Individuals in the organization performing different activities are
functionally interrelated. The working and maintaining of this relationship is possible only
through communication which provides for exchange of information. No business organization
can work without communication network. It is an important human skill. The ability to
communicate effectively is one of the major skills of a manager. According to a research
conducted by Paul Pigors and C. Mayers, an executive, supervisor or manager spends about 70%
of his time in communication. This face-to-face communication plays a vital role in managerial
decision-making. As Benjamin Balinsky said, "If there is any short-cut of executive
effectiveness, it is the mastery of the art of face-to-face communication." Communication is a
word derived from the Latin word "communis", literally meaning to make common, to share, to
impart, convey or transmit. Communication is the process through which two or more persons
come to exchange ideas and understanding among themselves.

2.7.1 The following are the definitions of communication:

(a) "Communication is an intercourse by words, letters, symbols or messages; and is a way that
one organization member shares meaning and understanding with another." (Koontz and
O'Donnell)

(b) "Communication is the sum of all the things one person does when he wants to create
understanding in the mind of another. It involves a systematic and continuous Process of telling,
listening and understanding." (Allen, Louis A.)

(c) "The word communication describes the process of conveying messages (facts, ideas,
attitudes and opinions) from one person to another so that they are understood." (Commin,
M.W.)

(d) "Communication is an exchange of facts, ideas opinions or emotion by two or more people."
(Newman and Summer)

(e) Communication is a "process of meaningful interaction among human beings. More

specifically, it is the process by which meanings are perceived and understandings are reached
among human beings." (Dr. Mc Farland D.E.)

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(f) "Communication is defined as intercourse by words, letters, symbols or messages, and a way
that one organization member shares meaning and understanding with another." (Bellows, Gilson
and Odiorne)

2.7.2 The Above Definitions Indicate the Following Characteristics:

(a) It involves more than one person.

(b) It deals with transmission of both facts and feelings.

(c) There are various medium of communication.

(d) A business organization has continuity. Hence the process of communication is also a
continuous one.

(e) The effectiveness of communication to a very large extent depends upon the required
understanding of what is being received and then responded.

Thus, the various expressions on communication emphasis the understanding of elements in the
communication. The sharing of understanding is possible only when the person, for whom the
message is meant understands it in the same sense in which the sender of the message wants him
to understand. Thus communication involves something more than mere transmission of message
and physical receipt thereof. The correct interpretation and understanding of the message is
important from the point of view of organizational efficiency. As such, the greater than degree of
understanding present in the communication, the more is the possibility that human action will
proceed in the direction of achieving organizational objectives.

2.8 Communication Process

Communication has been the process is a concept of changing rather than static existence.
The relationship events are seen as dynamic, continuous and flexible and are structured only in a
relative sense. Communication process, as such, has to be viewed, as a whole, a continuous and
dynamic interaction of variables both affecting and being affected by different variables.

2.8.1: Elements of Communication Process

The following are the elements of communication process:

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(a) Sender: The person, who intends to make contact with objective of passing information and
ideas to other persons, is known as sender. In market the advertisement given by the sponsor is
called sender.

(b) Ideas: This is the subject matter of communication. This might be an opinion, attitude,
feelings, views, order or suggestions, etc. The presentation of ideas regarding features, benefits
and functions of products and services in advertising.

(c) Encoding: Since ideas in communication are intangible and their transmission requires the
use of certain symbols such as words, actions or pictures. Conversion of the subject matter into
these symbols is called process of encoding. The message in a particular language is an example
of encoding.

(d) Media or Channel: When message is sent through TV, radio, newspapers, magazines etc. is
called media or channel. The message cannot be transmitted of its own so it has to take help of
media. As per requirement of the target group the media is selected.

(e) Receiver: It is the party for whom the message is meant. Receiver receives the message
transmitted by sender. Though a particular medium the message is received at the other end and
it is called receiver.

(f) Decoding: After receiving the message in symbols, it is converted into simple language so
that it can be understood. Without decoding the meaning may not be conveyed to the parties
properly.

(g) Feedback: Is the process of ensuring that the receiver has received the message and has
understood also, it is the conformation of the message understood. When the reply from the party
has been received then it is called feedback. It is very important element of the communication
process.

(h) Noise: During communication process when there is disturbance, it is called noise. The noise
reduces the effectiveness of the communication. If the noise is very heavy the signal may be lost
totally. The noise may be external or in channel itself. The best thing is that it should be within
control only.

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 2.8.2 Importance of Effective Communication

Communication is passing of information and understanding among different members of an

enterprise and is of fundamental importance to all functions of management, since the
performance of all managerial functions involves exchange of correct and meaningful
information. Moreover, every act of communication influences the organization in one way or
another. Communication is the life blood of an organization and is vital for its survival. In fact,
an organization cannot exist without effective communication. In the words of J.M. Black,
“sound communication is a master key to a company's success." An effective and sound
communication

(a) It facilitates effective planning: Sound planning requires participation of all those who are
concerned with decision-making process and involves interaction and exchange of ideas,
thoughts, opinions and views among them. Again, the plan cannot be effective and correct
policies cannot be framed unless correct information and data are available. Moreover, the
decisions made and policies framed by the management need to be covered to the subordinates
for their compliances. All these activities involve and require effective communication;
otherwise they cannot be performed successfully and effectively. The framing of a plan and its
successful implementation depends on sound and effective communication.

(b) Basis for decision-making: Proper decision-making depends on availability of right and
reliable information and data, identification of real problem and consideration of pros and cons
of various courses of action available. This also involves interaction among the members of the
organization. It is through communication that the right information is available and other things
can be considered for arriving at appropriate decisions. Communication plays an important role
in decision-making process.

(c) Basis of coordination: In order to accomplish enterprise objectives, efforts of all the members
need to be coordinated and integrated. It is through communication that this purpose can be
achieved. It requires communication both downwards and upwards or even horizontally. Thus
effective communication ensures coordination among different limbs of the organization and is
essential for smooth functioning of the organization.

23
(d) It improves superior - subordinate relationship: An effective communication facilitates
interaction among different members of the organization, results in clear understanding of the
problems and issues involved and helps in finding the best way to get the work done to fulfill
both individual and organizational goals. Thus communication helps in improving superior-
subordinate relations by developing good human relations both formally and informally.

(e) Improves motivation and morale: A good communication is the foundation of high morale. A
good sound communication between the members of the organization helps in developing better
human relations, eliciting willing cooperation of all to work toward realizing the organization
objectives and thus creating an environment suitable for all to work in. Good communication has
a positive impact on employees' morale.

(f) Helps in performing properly staffing function: Staffing function comprises recruiting,
selecting, training and developing right type of persons for various positions. All these activities
require exchange of lot of information sharing of views and experience. It also involves coaching
and guidance which are not possible without proper communication.

(g) Creates good industrial relations: Good communication leads to mutual understanding and
helps in building better industrial relations between management and workers, thus making way
for the growth and prosperity of the organization as a whole.

(h) Good communication leads to good public relations: Building good corporate image and
keeping good and healthy relations with various agencies like the government, trade unions,
customers, community and other agencies are important for the success of the enterprise. It is
only through communication that good public relations can be maintained with them.

(I) Increases managerial efficiency: Communication is essential for quick and systematic
performance of managerial functions. The management conveys through communication the
goals and targets, issues instructions, allocates jobs and responsibilities and looks after
performance of subordinates. As a matter of fact, communication lubricates the entire
organization and keeps the organization at work. In modern days the skill of communication has
become a very essential quality of successful management.

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 2.8.3 Benefits of Marketing Communication

Marketing communication is a very important activity in marketing department of the company.

In every business nearly half of the time of mangers is used in communication only. It is very
essential for coordinating the various activities being performed in the department and company.
When the related activities are coordinated then only the tasks would be completed in time and
more effectively. It may be related to all departments. Specially, in marketing department the
activities are related to product, pricing, promotion, placement, people, physical evidence and
process. To work and get the objectives fulfilled as per the planning of the company the strong
need for communication is felt so that effectiveness of marketing department can improve. The
benefits of promotion or marketing communication are following:

(a) Helpful in Creating Awareness: When communication is given to the customers, dealers and
salesmen then it creates the awareness among the target groups. Without communication the
information is not known to them. Without knowledge of any thing the work or job of any time
cannot be performed. Before putting efforts for any activity the need for information is must.
This need is fulfilled by marketing communication.

(b) Gives Reminders: It is through communication the information is repeated. It reminds to the
customers, dealers, salesmen and other concerned person. Over a period of time if earlier
communication is forgotten then it is to be repeated to remind. The communication is very
essential to remind and follow up action of marketing department.

(c) Persuades Customers: When communication is given in the market through advertisement
regarding products or services repeatedly, it starts creating interest among them. It would very
difficult for the customers to avoid the communication given repeatedly. One day it would be in
position to persuade the customers to buy the products. Further, it would help in retaining the
existing customers also.

(d) Boosts Sales and Profits: When the advertising takes the message regarding the products,
services and the company to the customers, they would buy the products.

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 CHAPTER THREE (3)

RESEARCH METHODOLOGY

3.0 Introduction

The method used in the research and analysis of data collected and conclusions to be drawn
is one of the important part of any research work. This methodology will satisfy the most
appropriate methods of investigation, the nature of the research instruments, the sampling and
the types of data (De Wet, 1997).

Therefore, in this chapter, we are going to look at the methods that will be employed in the
collection of data, the targeted population and sampling type and analyze the impact of
marketing strategy on profitability of GT bank ltd for the financial year 2017, 2018 and 2019.

3.1 Research Design

Research design is the conceptual structure within which research is conducted. It comprises
the blueprint for the collection, measurement and analysis of data. The study is expected to
examine the impact of marketing strategy on profitability in the private sector, taking GT bank
S/L ltd as our case study.
26
 (According to Du Ploy 2001:81) “Research strategy and research design” cited that research
strategy aids research effort by defining the context within which it will be conducted and it also
provides link between research objectives and research activities while research design derived
us from the methodology paradigm- qualitative or quantitative that fits a particular research
problem. The research designs used was a survey design to collect data for this study for which
the primary and secondary data were obtained through questionnaires, interviews and journals.
The questionnaires were distributed and interviews were conducted to customers and staffs of
GT bank S/L ltd.

3.2 Population and Sample

3.2.1 Population

Population can be defined as a collection of people or items under investigation with the
characters one wish to learn about. However, for the purpose of this research exercise,
population was taken from GT bank S/L ltd. The population of the study includes employees and
customers from all branches within Freetown working in Guarantee Trust Bank and the
customers of the bank.

3.2.2 Sample

According to Field, 2005, a sample ‘is a smaller collection of units from a given population (or
subset) used to determine the truth of the population”. Due to the constraints of resources and
workload (time, money and man-power), therefore a representative sample or subset of that
population which gives a results with known accuracy will be used.

Also, due to the difficulty (logistics and time) of covering all GT bank’s branches across
S/L, we will limit this research to the headquarters which is located at 12 Wilberforce Street in
Freetown. In this regard, the geographical location in which our main source of information is
generated will be 12 Wilberforce Street which is the bank’s headquarter.

3.3 Research Instrument

The research instrument involves the collection of data for the intended study as a way of
reaching conclusions statistically about a phenomenon. The research instrument used in this
exercise is both the primary and secondary data instrument.

27
 The primary and secondary data were used to accomplish the study and to collect the data
from the respondents included in the sample questionnaires were distributed. The questionnaires
were distributed to customers and staffs of the bank. But, the questions for customers and the
staffs are different because both of them view or consider the bank in different perspective. The
questionnaire for the customers is formulated based on the 4 P’s (i.e. product, price, place and
promotion) and the questionnaire for the staffs is also formulated based on the 4 P’s but it also
further looked at the advantages or benefits the bank gets while implementing the strategies.

The questionnaires were adopted and modified from the questionnaires on marketing
strategies in the banking sector. The questionnaires are prepared in the form of Likert-Scale type
(showing respondents agreement or disagreement) by constructing into five-point scale where
the lowest scale represent strongly disagree and the highest scale represent strongly agree
(Likert, 1932). The questionnaires distributed to the respondents are organized based on the
demographic question regarding the respondents.

In order to collect the necessary data for this study, two sets of data collection instruments
were employed. Instrument set A (Appendix 1) was a questionnaire given to staffs. Set B
(Appendix 2) was a questionnaire given to customers.

3.3.1 Questionnaires or Primary Research

Questionnaire is a series of questions asked to individuals to obtain statistically useful

information about a given topic. When properly constructed and responsibly administered,
questionnaires become a vital instrument by which statements can be made about specific groups
or people or entire populations.

Questionnaires are frequently used in social research. They are a valuable method of
collecting a wide range of information from a large number of individuals, often referred to as
respondents. Adequate questionnaire construction is critical to the success of a survey.
Inappropriate questions, incorrect ordering of questions, incorrect scaling, or bad questionnaire
format can make the survey not to have value, as it may not accurately reflect the views and
opinions of the respondents. The questionnaire contained the closed-ended questions. The
closed-ended questions involved “questions” that were answered by simply checking a box or
circulating the actual response from asset of options that were provided. While the closed-ended

28
questions allow for easier analysis of the data due to standardized questions, their main
disadvantage is that they allow the researcher to determine only what the respondents are doing
and not how or why they are doing it.

3.3.2 Desk or Secondary Research

Desk research was carried out by using information which had already been published by
another party (i.e. it is secondary). The information was obtained from:

 Internal information available in-house (past enquires/sales records, etc.)

 External information available from sources which have reasons to publish information
(market surveys, annual reports, etc.)
This type of research is called Desk research because it is literally carried out from a desk.
Using published sources – books, journals, articles, statistical information services, the internet,
etc., - researchers can obtain a vast amount of material which can help in making initial
assessments of a market.

Remember, though, information collected in this way is secondary – i.e. it is not new, but
second – hand. Further, such information will have originally been prepared, in its published
form, for someone other than the organization wishing to use it.

3.4 Ethical Consideration

Research in business/banking industry was found out to be very boring. In the country
where the importance of research was still unidentified, the researcher expects to suffer a lot to
convince the importance of this research to improve business. Some managers and employees
were not quite positive to handle questionnaires. However, it is research ethics to gather
necessary information with patience till the researchers concluded everything that they need from
respondents. All information that were collected from the respondents were treated with
confidentiality without disclosure of the respondent’s identity. Moreover’ no information was
modified or changed, hence information gotten was present as collected and all literatures
collected for the purpose of this study was appreciated in the reference list.

3.5 Method of Data Collection

29
 This refers to the methodology that will be used to collect data and for the purpose of this
research work; data was collected from Guaranty Trust Bank S/L ltd head office in Freetown
using:

 Questionnaire,
 Internet
 Desk study
 Journals and articles
 Personal interviews

Sources of data collection: This refers to the means through which data will be collected for the
research, but for the purpose of this study, our data was collected from the following sources:

 Accounting Department of Guaranty Trust Bank S/L ltd 2017-2019

 Marketing Department of Guaranty Trust Bank S/L ltd 2017-2019

3.6 Method of Data Analysis

Data analyses are conducted through Excel using tables and charts to provide details
regarding the demographic question and the impact of marketing strategy on profitability in the
private sector (GT bank S/L Ltd).

In order to examine the impact of marketing strategy on profitability in the private sector,
tables are used in Microsoft Excel for the data analysis.

At the onset of this study, questionnaires were distributed and interviews were conducted to
customers and staffs of GT bank, and from which 50 questionnaires were collected (30 responses
each from customers and 20 responses each from staffs) giving the response rate of 91%. The
data collected and observation made for this research was analyzed using tables and charts based
on the questionnaires that were distributed to the customers and staffs of the bank.

3.7 Summary

30
 This chapter shows how the research study was conducted, research design, and sources of
data, sampling and target population. It also shows the research instruments used, the method of
data collection, analysis of the data collected and the ethical consideration of all information
contained in this chapter.

CHAPTER FOUR (4)

Data Presentation, Result and Discussion.

4.0. INTRODUCTION

This chapter deals with the presentation of data (results), analysis and discussion of result
obtained from our research findings. As indicated in the previous chapters, the purpose of this
study is to examine the impact of marketing strategy on profitability in the private sector taking
GT Bank as our case study. Therefore, this chapter reports the investigation results obtained from
staffs and customers of GT Bank Sierra Leone Limited.

4.1 GT Bank’s GENERIC STRATEGIES

Porter (1980) argues that a firm’s strengths emanates from its cost advantage and
differentiation. According to Porter (1980), three generic strategies emerge from these strengths
(broadly or narrowly): cost leadership, differentiation and focus. Generic strategies are not

31
specific to a firm or an industry. A firm’s success in strategy depends on how it positions itself in
its environment and how effective it competes in the marketplace (Porter, 1980; Wright, 1987;
Murray, 1998; Miller; 1992 Hill and Jones, 2010; Pearce and Robbinson, 2010). GT Bank has
adopted these generic strategies (cost leadership, differentiation and focus) at different stages of
its operations. These generic strategies are discussed below:

4.1.1 COST LEADERSHIP STRATEGY

Cost leadership focuses on being the lowest cost producer in the industry. GT Bank adopts cost
leadership strategy by offering standardized product at low per-unit cost for customers who are
price sensitive. This enables the bank to become one of the lowest cost banks in the Sierra Leone
banking industry. The bank’s sources of cost leadership include: size – economics of scale;
greater labor efficiency and effectiveness; control of overheads; superior management; greater
operating efficiency and effectiveness; low labor and production cost; use the latest technology
to reduce cost and or enhance productivity; favorable access to low cost sources of supply; and
reduction in waste. The benefits of cost leadership enjoy by the bank include: enjoying higher
than average profit; ability to engage in price war; eliminate rivals; increase of market share;
building barriers to the entry of new comers to the market; weakening the threat of substitutes;
and ability to enter new market. Notwithstanding the benefits of cost leadership, challenges faced
by the bank in relation to cost leadership include: vulnerability to even lower cost of operators;
leads to damaging price wars; difficult in sustaining cost leadership in the long run; competitors
intimacy; technological changes and proximity in differentiation is lost (Lynch, 2009; Grant,
2010; Pearce and Robbinson, 2010; Chevalier-Roignant and Trigeorgis, 2011; Johnson et al.,
2011, Harrison and St. John, 2012; Hill and Jones, 2012; Wheelen and Hunger, 2012).

4.1.2 DIFFERENTIATION STRATEGY

Differentiation is the exploitation of a product or service, believed to be unique and valued by

customers. GT Bank adopts differentiation strategy by offering unique products for customers
who are relatively price-insensitive. To successfully adopt differentiation strategy, customers
must recognize the added value and appreciate the difference. This suggests that firms that
succeed in a differentiation have: access to leading scientific research; a strong creative product
development team; strong sales team with the ability to successfully communicate the strengths
of the product; and reputation for quality and innovation. GT Bank sources of differentiation
32
include: creation of strong brand; superior performance; high quality; innovation in packaging;
speed of distribution and delivery; higher service levels; greater flexibility; and quality of
materials. The benefits the bank derives from differentiation include: prospect of changing a
premium price; demand for a differentiated products is less elastic than that for competitors’
products; induces above average profits; and creation of additional barriers to entry to the market
for new comers. However, there are several risks associated with differentiation strategy. This
includes: difficulties of sustaining differentiation; differentiation involves higher cost; there is a
risk of creating differences that customers do not value; customers might become price sensitive
and choose on price rather than uniqueness; imitators may narrow the differentiation; and rivals
pursuing a focus strategy may be able to achieve even greater differentiation in their market
segments (Lynch, 2009; Grant, 2010; Pearce and Robbinson, 2010; Chevalier-Roignant and
Trigeorgis, 2011; Johnson et al., 2011, Harrison and St. John, 2012; Hill and Jones, 2012;
Wheelen and Hunger, 2012).

4.1.3 FOCUS STRATEGY

Focus strategy seeks to exploit unique position in a niche segments of the market. GT Bank
adopt focus strategy by offering customized products targeted to fulfil the needs of groups of
customers. Focus strategy concentrate on a limited part of the market. Focus strategy advocate
that the needs of a customer can be better served by focusing entirely on peculiar need of the
group of customers. Focus strategy can be categorized in two: Focus cost leadership (Provision
of goods or services at lower cost to a segment) and focus differentiation (Provision of a
differentiated product or a service to a segment). A successfully focus strategy should: Identify a
suitable target customer group; Identify specific needs of the group; and decide on whether opt
for cost leadership or differentiation with in the segment. The benefits of adopting focus strategy
by GT Bank include: Promotion of lower investment in resources; firms benefit from
specialization; provides scope for greater knowledge of a segment of the market; makes entry to
new market less easy and less costly; and enjoyment of high degree of customer loyalty. of scale
that However, the problems associated with focus strategy include: Limited opportunities for
growth; sacrifice of economies would be available from a larger market; risk of imitation; and
risk of changes in the target segment (Lynch, 2009; Grant, 2010; Pearce and Robinson, 2010;
Chevalier-Roignant and Trigeorgis, 2011; Johnson et al., 2011, Harrison and St. John, 2012; Hill
and Jones, 2012; Wheelen and Hunger, 2012).
33
4.2 DEMOGRAPHIC ANALYSIS OF RESPONSE RATE

The data was collected by using the questionnaire that were developed in five scale ranging
from (Strongly agree to Strongly Disagree). SA=Strongly Agree, A=Agree, N=Neural, D=
Disagree and SD=Strongly Disagree. A total of fifty-five (55) questionnaires were distributed to
Twenty (20) employees and Thirty-five (35) customers of Guaranty Trust Bank Sierra Leone ltd.
and Fifty (50) (91%) were obtained valid and used for analysis.

4.2.1 Demographic Characteristics of Respondents

Respondents were classified into the following demographic characteristic (Staff/Employees):

 Designation
 Working Experience
 Sex

Respondents for Customers:

 Gender
 Age
 Educational Qualifications
 Occupation

In view of the researcher these demographic characteristics have so much bearing on

responses given by the respondents on the impact of marketing strategies on profitability of GT
Bank. In all, the study sampled Fifty (50) questionnaires, Twenty (20) employees and Thirty-five
(35) customers of Guaranty Trust Bank Sierra Leone ltd. As many as 60% of respondents were
females and 40% were males from Employees of GT Bank.

Table 4.2.1: Demographic characteristics of staff

DESCRIPTION OF RESPONDENTS RESPONSES

NUMBER PERCENTAGE
SEX
Male 8 40
Female 12 60
Total 20 100
WORKING EXPERIENCE

34
 1 Year 3 15
2 Years 5 25
3 Years 4 20
4 Years 3 15
5 Years and Above 5 25
Total 20 100
Source: Research data 2020

Figure 4.2.1: Showing a graphical presentation of demographic characteristics

of staff

35
Source: SPSS analysis of questionnaire 2020

Table 4.2.2: Demographic characteristics of customers

DETAILS NUMBER PERCENTAGE (%)

GENDER

Male 18 60
Female 12 40
Total 30 100
AGE

Below 18 2 6.7
18 to 25 8 26.6
25 to 30 14 46.7
Above 35 6 20
Total 30 100
EDUCATIONAL
QUALIFICATION
High school (SSC) 5 16.7
Inter (Tertiary) 2 6.7
Undergraduate 16 53.3
Post graduate 6 20
Others 1 3.3
Total 30 100
OCCUPATION

Govt. service 15 50
Private service 7 23.3
Agriculturist 2 6.7
House wife 3 10
Own business 3 10
Professional 0 0
Others 0 0
Total 30 100
Source: Research data 2020
4.2.2: Graphical presentation of demographic characteristics of customer

Figure 4.2.2.1: Showing gender of respondents (customers)

36
 GENDER
GENDER
Male
Female
40%
60%

Source: excel analysis of questionnaire 2020

The above chart shows that 60% customers were male and 40% were females. This indicates that
the male customers were more corporative in answering and responding to our research work on
their dealings and the services GT Bank provides for them than the female customers.

Figure 4.2.2.2: Showing age of respondents (customers)

AGE
AGE

Below 18
20% 7% 18 to 25
27% 25 to 30
Above 35

47%

Source: excel analysis of questionnaire 2020

From the chart above, the age distribution of the respondents indicates that 7% were those below
the age of 18 of years, 27% were between the ages of 18-25 years, respondents between the ages
of 25-35 years constitute 46% of the data analyzed and those above 35 years constituted 20% of
the reminder of the survey. This implies that majority of the age bracket of the customers’ survey
falls within the working class age group followed by age bracket within the age of middle class
and undergraduate population of the survey collected from the field work.

37
Figure 4.2.2.3: Showing educational qualification of respondents (customers)

EDUCATIONAL QUALIFICATION
EDUCATIONAL
QUALIFICATION
High school (SSC)
3% 17%
Inter (Tertiary)
20% Undergraduate
7% Post graduate

53%

Source: excel analysis of questionnaire 2020

The educational qualification of the respondents shows they are quite literate. From the above
chart, about 53% were undergraduate and 20% had their post graduate courses completed and
senior secondary school (high school) education constitute 17% of the survey. 7% had acquired
their tertiary education while only 3% having no education at all. This level of literacy enhanced
the research, especially during the data collection. This was because most of the respondents
were able to understand the issue involved on the impact of marketing strategies on profitability
in the private sector especially the strategies used by GT Bank S/L ltd.
Figure 4.2.2.4: Showing occupation of respondents (customers)

38
 OCCUPATION
OCCUPATION

Govt. service
Private service
10% Agriculturist
10% House wife
Own business
7% 50% Professional

23%

Source: excel analysis of questionnaire 2020

The above chart shows that 50% of the respondents constituted of Government service
workers, 23% private sector workers, 7% were agriculturist, 10% made up of house wife, 10%
own their own businesses and 0% represented professional and other occupation respectively.
Being majority are workers, it indicates that they are somehow knowledgeable on the essence of
marketing strategy and its impact on profitability.

4.3 MARKETING STRATEGIES

Marketing strategy is a crucial determinant for a successful banking performance. However,

good strategy planning alone does not guarantee success. Successful strategies also involve
robust and effective implementation, evaluation, and control mechanisms. This section of the
questionnaire sought to get from the respondents regarding the influence of marketing strategies
on profitability in the private sector especially GT Bank as a case study.

4.4 ANALYSIS OF QUESTIONNAIRE

4.4.1 Presentation of question 1 from respondents and the group audited
profit and loss account
Table 4.4.1 illustrates if marketing strategies increase profitability
QUESTION RESPONSES
1) Marketing strategies increase NUMBER PERCENTAGE
profitability at GT Bank
Strongly agree 13 65
Agree 7 35
Neutral 39 0 0
Disagree 0 0
Strongly disagree 0 0
Total 20 100
Source: research data 2020

Table 4.4.1.1 below illustrates the group statement of profit and loss account of GT Bank SL Ltd
for 2018 and 2017 accounting year.

PROFIT AND LOSS ACCOUNT FOR

THE YEAR ENDED 31 DECEMBER

DETAILS 2018 2017

LE 000 LE 000

Interest income 114,832,222 90,330,708

Interest expense -17,257,430 -14,523,202
Net interest
income 97,574,792 75,807,506

Net fee and

commission income 57,104,721 43,623,162
Net trading income 9,843,232 8,981,763
Revenue 164,522,745 128,412,431

Other income 2,915,419 74,892

Impairment
(loss)/gain -5,367,725 3,335,855
Personal expense -20,809,846 -17,215,370
Operating lease
expense -612,332 -1,210,204
Depreciation
expense -5,780,475 -5,377,837
Other expense -44,685,147 -41,932,935
Profit before
income tax 90,182,639 66,086,832

Income tax expense -27,173,495 -19,933,311

Profit for the year 63,009,144 46,153,521
Source: research data 2020

The above question was asked for the researchers to examine if there is a linear relationship
between marketing strategies and profitability (i.e. if a business increases its marketing strategies
that will enable profitability to increase proportionately). Table 4.4.1 show case that marketing

40
strategies increase profitability as 65 percent of the respondents strongly agree and 35 percent of
the respondent agree. Table 4.4.1.1 (the audited group profit and loss statement of GT Bank)
prove that marketing strategies increase profitability as the profit from 2017 to 2018 increase by
(Le 63,009,144 – Le 46,153,521/ Le 46,153,521*100) = 36.5%. This indicates that there is a
significant relationship between marketing strategy and profitability and therefore the alternative
hypothesis (H1) is accepted and the null hypothesis (H0) is rejected.

4.4.2 Presentation of question 2 from respondents

Table 4.4.2 illustrates whether marketing strategy and service improvement are related

QUESTION RESPONSES
2) Marketing strategy and service improvement are NUMBER PERCENTAGE
related at GT Bank
Strongly agree 14 70
Agree 3 15
Neutral 2 10
Disagree 1 5
Strongly disagree 0 0
Total 20 100
Source: research data 2020

The above question tries to examine whether there is a relationship between marketing
strategy and service improvement. Table 4.4.2 shows that marketing strategy have a significant
relationship with service improvement as 70 percent of the respondents strongly agree and none
of them strongly disagree. Since existing customers can be retained and new customers can be
attracted when service is improved, a positive experience by customers create loyalty, happiness
and in turn help to build credibility. An effective marketing strategy ensures having quality
service which enables a business to overcome or outperform it rivals or competitors in the
market in which it operate, because not only excellent products can make customers to choose
you as first choice and ready to come back but also improved quality service. Because of this
fact, the alternative hypothesis (H1) is accepted and the null hypothesis (H0) is rejected (i.e.
there is a significant relationship between marketing strategy and service improvement).

4.4.3 Presentation of question 3 from respondents

Table 4.4.3 illustrates that marketing strategies and profitability are different variables

41
 QUESTION RESPONSES
3) There is difference between GT Bank’s NUMBER PERCENTAGE
profitability and its marketing strategies
Strongly agree 10 50
Agree 5 25
Neutral 1 5
Disagree 3 15
Strongly disagree 1 5
Total 20 100
Source: research data 2020

The above question was asked to determine whether profitability depend on marketing
strategy. From the response of the respondents and the view of some prominent scholars like
Kotler analyzed below showcase that marketing strategy and profitability are different variables.
That is, marketing strategy is the independent variable and profitability is the dependent variable.

From the above table, 50 percent of the respondents strongly agree that profitability and
marketing strategies are different which actually shows that they are indeed different variables.
Also, according to Philip Kotler “bank marketing is the aggregate of functions, directed at
providing services to satisfy customers financial (and other related) needs and wants, more
effectively and efficiently than the competitors keeping in view the organizational objectives of
the bank”. On the other hand, profitability indicates the earning of banks which can be measured
by the return on asset (ROA) and the return on equity (ROE) which is usually expressed as a
function of internal and external determinants (Athanasoglou, 2016). Therefore, the alternative
hypothesis (H1) is accepted and the null hypothesis (H0) is rejected (i.e. there is a significant
difference between profitability and marketing strategy).

4.4.4 Presentation of questions 4 from respondents

Table 4.4.4 illustrates that sale promotion techniques affect customers buying behavior

QUESTION RESPONSES
4) Sales promotion techniques at GT Bank affects the NUMBER PERCENTAGE
customers buying behavior
Strongly agree 11 55
Agree 7 35
Neutral 1 5
42
 Disagree 1 5
Strongly disagree 0 0
Total 20 100
Source: research data 2020

From the above presentation, sales promotion techniques affect the customers buying
behavior as 55 percent of the respondents strongly agree to that. In other words, the existing
customers of GT Bank are using the bank’s service more frequently and new customers use their
service because of the promotions the bank offer to them such as free offers, coupons, cash
discounts, warranties, prices etc. As a result of this, the alternative hypothesis (H1) is accepted
and the null hypothesis (H0) is rejected (i.e. sales promotion techniques are managed in the
customer buying behavior).

4.4.5 Presentation of question 5 from respondents

Table 4.4.5 illustrates that product design increases profitability

QUESTION RESPONSES
5) The products GT Bank design increase the NUMBER PERCENTAGE
profitability of the bank
Strongly agree 12 60
Agree 8 40
Neutral 0 0
Disagree 0 0

43
Strongly disagree 0 0
Total 20 100
Source: research data 2020

From the above presentation, 60 percent of the respondent strongly agree that product design
increases profitability. This means that the products the bank design and offer satisfy the needs
and wants of the customers and hence increase profitability. This indicates that there is a
significant relationship between product design and profitability and hence the alternative
hypothesis (H1) is accepted and the null hypothesis (H0) is rejected.

4.5 DISCUSSION OF THE FINDINGS

The objective of this research was to assess the impact of marketing strategies on the
profitability of the private sector in the case study GT Bank. This was because most literatures
indicate that marketing strategies have positive relation with organizational profitability.

Since GT Bank is a financial institution operating in the private sector, the research try to
understand whether marketing strategy have an impact on their profitability and as we have seen
from the above findings it truly proves.

From the findings of the case study major marketing strategies (like service improvement,
sales promotion techniques and products design) have a positive relation to the profitability of
the organization. As shown from the responses of the respondents on the five hypotheses develop
for the work there is positive relation between marketing strategy and company’s profitability
performance with over 50 percent strongly agree and agree. This significance tells that there is
very strong relationship between marketing strategy and profitability.

4.6 LIMITATION OF THE STUDY

The research on the impact of marketing strategy on profitability has the following limitations:

 Certain respondents did not understand some questions; and were unable to provide all
the information needed for the research work. Some estimates, calculation, judgment and
data analysis were made to provide some answers to questions not understood by
respondents.
 Conducting personal interview with all of the marketing staffs of GT Bank, was not
possible. Some of the staffs are very difficult to reach at, even if you meet them, they
44
 will not give you the information that you really need because of the competition in the
banking industry is very high. With all of these challenges, effort was made to obtain
much need information to carry out this research work.

4.7 CHAPTER SUMMARY

This chapter shows data presentation, results and discussion. It highlights the generic
strategies of GT Bank, demographic analysis of the respondents, analysis of questionnaire,
discussion of findings and limitation to the work.

CHAPTER FIVE (5)

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction

This is a comparative study that is limited in scope and sample size, but it can contribute to
further study on the impact of marketing strategy on profitability in the private sector especially
the private banking sector in Sierra Leone context. Therefore, based on the analysis and
interpretations made at the pervious chapter the following summaries, conclusions and
recommendation are made.

45
5.1 Summary of Findings and Recommendations:

5.1.1 Objective 1: To determine the relationship between marketing strategy and profitability.

From chapter 4 it is clear that marketing strategy increases profitability. Below are some of the
strategies employed which enable GT Bank to earn more profit:

 GT Bank targeted young and middle-income customers who were seen as unprofitable
by other Banks. They provide products to attract students and middle-income individuals
such as Zero balance savings accounts and cash back on cinema tickets.

 They set up electronic banking centres, ATM galleries and introduced other products to
increase customer loyalty. This increased their retail customer base and deposits. Also,
because of higher and cheaper deposits, they were able to offer better terms to corporate
customers further increasing revenue.
Recommendations:

We recommend GT Bank to continually do the following:

 Build their customer base on young people and middle-income individuals as they
account for the majority of Sierra Leone's population.

 Introduce innovative products that would attract high school and undergraduates
students.

 Improving their electronic banking products such as ATMs, staff salary loan, salary
advance scheme etc.
5.1.2 Objective 2: To determine the relationship between marketing strategy and service
improvement.

46
From our analysis in the previous chapter it is clearly seen that marketing strategy has significant
relationship on service improvement. Below are our findings with regards to service
improvement at GT Bank:

 GT Bank has a Total Quality Management unit which was established in 2010 with the
objective of customer service quality improvements, the re-awakening of device culture
amount the bank's employees, customer focus and resolving customer complains. To
achieve the above objectives, the main focus of the unit is in the bank's customer touch
points which are:

1) Branches (Transaction services, market staff, administration staff, support staff e.g. security,
tea servers, cleaners, switchboard operators.)

2) Electronic channels (Contact centres, ATMS, internet banking, card services, mobile
banking).

3) Complain sub-unit.

 GT Bank structured the Total Quality Management unit to report directly to the
managing director. The unit uses the following monitoring channels to effectively
resolve customers complain:
 Monthly branch assessment
 Monthly branch meetings
 Spot checks by TQM coordinators
 Contact centre quality assurance
 Customer feedback etc.

 Typically, complaints from customers include but not limited to the following:
 Processing time of key products and services e.g. loans, new accounts, credit cards etc.
 Waiting times like down time and queuing time.
 Customer complaint, written or verbal
 Promptness on responding to customer inquiries such as account balance confirmation
etc.

47
  Accuracy and timelines of statement rendition
 Friendliness and effectiveness
Recommendation:

We recommend GT Bank to maintain the Total Quality Management unit as its objective is to
look into customer service quality improvements, re-awakening of service culture amount the
bank's employees and resolving customer complains as all of these help to improve the bank's
service.

5.1.3 Objective 3: To identify the difference between bank's profitability and marketing
strategies.

Chapter 4 analysis shows clearly that there is difference between bank's marketing strategies and
bank's profitability in contextual term.

 Marketing strategies have been an independent variable which help differentiate

competitors by offering new technologies, providing satisfactory service for customers in
turn targeting new people in new ways. Whereas, is a positive result of a good strategy
(marketing). Thus making is a dependent variable.
Recommendation:

Considering the nature of businesses today, management of GT Bank should tirelessly

implement more marketing strategies to keep them profitable. Since marketing strategy is also
about ethical codes. GT Bank should not only focus on profitability aspect of their operation but
the moral aspect as well. With regard to this, the customers' purpose for frequent deposit or
withdrawal and their source of resource should or must not be questioned.

5.1.4 Objective 4: To evaluate the effect of sales promotion techniques on the customer
buying behavior.

Base on chapter 4 analysis sales promotion affect the customer buying behavior.

 GT Bank promotion activities and components are advertising, personal selling, sales
promotion and publicity. At GT Bank advertising was mostly used and the objectives of
advertising were to expand GT Bank's sales and to support personal selling. On the other
48
 hand the objectives of using personal selling were to make sales, to meet the needs of the
customers and to try to reach one person at a time. Although sales promotion is used, but
it is not used extensively. Sales promotion strategy used includes money off-free
premium at point of sales, free mailing, coupons, sampling, self-liquidating offers, bonus
packs displays and customer sweepstakes. This view is aptly made clear by Inyanga
(1998).
Recommendation:

The management of GT Bank must not view sales promotion as an expensive campaign to settle
the hungry and greedy costumers. They must understand hence train employees to know that
sales promotion is a tool that encourage depositors to keep depositing and creating capital for the
bank. The expenditure on sales promotional campaign is far less than the benefits that will be
accrued from such practice.

5.1.5 Objective 5: To identify the extent to which product design affects the profitability of a
company.

Product design affects the profitability of GT Bank base on the analysis from chapter 4. Below
are some of the products of GT Bank:

 GT Bank has recently introduced their *3737# product. This product enables customers
to easily and instantly generate their balance, allows them to check their balance
available on their accounts, get mini account statement, transfer funds between owns
accounts like savings to current. The system allows their customers to transfer funds
from their account to other individuals account at the bank; the system also allows their
customers to purchase prepaid electricity tokens directly from their account at the bank.
The system also enables non – GT Bank customers to open account for themselves by
providing basic personal information including date of birth and address.

 GT Bank remains the first bank to introduce an electronic notification system-Guaranty

Trust Electronic Notification System (GeNS)-which notifies customers about all
transaction on their accounts via their phones and e-mail.
Other products includes:

49
  GT Automated Payment System
 GT Swift Mailer
 Smart kids/ Students Saving Account
 GT Connect
Recommendation:

GT Bank management should continue to improve the cyber security on their digital products so
that hackers cannot have any access to these product which will make their customers more
safer.

5.2 Conclusion

In conclusion, the research work revealed that marketing strategy has an effect on profitability. It
is clear that GT Bank is marketing oriented. Marketing plays a significant role in the bank by
retaining and prospecting for new customers both internal and external. It must be emphasized
that, it is through the activities of marketing that has led to the growth and expansion of GT Bank
in Sierra Leone and the other countries where they operate like Nigeria, Ghana, UK etc. It can
now be said that if any business want to be successful especially financial institutions, they must
practice marketing strategy.

5.3 Recommendations

With the above mentioned recommendations on the study's findings below are other general
recommendations to the research:

The research showed that the bank’s quality service is practical at the same time as commitment
therefore we recommend that staffs should pick up on their level of commitment and service
quality to help improve profitability and ensure their performance at moderate peak along with
customers need.

We also recommend that the bank work on their relationship marketing a little. Although it is
clear in the above analysis the GT Bank is customer oriented, does not mean the perception of
their stakeholders especially customers, cannot be changed.

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We also recommend that GT Bank consistently meet or exceed customer expectations to
overcome most of the major problems that are unique in services.

Finally, we recommend that GT bank should demonstrate goodwill to customers so they can feel
acknowledged and valued and somehow work on their ambiance.

References

Adrian, T, A Estrella and H S Shin (2010): "Monetary cycles, financial cycles, and the business
cycle", FRB New York Staff Report 421.

Albertazzi, U and L Gambacorta (2009): “Bank profitability and the business cycle”, Journal of
51
Financial Stability, 5, pp 393—409.

Alessandri, P and B D Nelson (2015): “Simple banking: profitability and the yield curve”,
Journal of Money, Credit and Banking, vol 47, 1, 143-175.

Altunbas, Y, M Binici and L Gambacorta (2018): "Macroprudential policy and bank risk",
Journal of International Money and Finance, 81, 203-220. Arellano, M and O Bover (1995):
“Another look at the instrumental variables estimation of error-component models”, Journal of
Econometrics, no 68, pp 29—51.

Bikker, J and P Metzemakers (2005): “Bank provisioning behaviour and procyclicality”, Journal
of International Financial Markets, Institutions and Money, 15, pp 141—57. Bolt, W, L de Haan,
M Hoeberichts, M R C van Oordt and J Swank (2012): “Bank profitability during recessions”,
Journal of Banking and Finance, vol 36, issue 9, pp 2552—64.

Borio, C, C Furfine and P Lowe (2001): “Procyclicality of the financial system and financial
stability: Issues and policy options”, BIS Papers, no 1. Borio, C, L Gambacorta and B Hofmann
(2015): “The influence of monetary policy on bank profitability”, BIS Working Papers, no 514,
October. 21 Bourke, P (1989): “Concentration and other determinants of bank profitability in
Europe, North America and Australia”, Journal of Banking and Finance, vol 13, 1, pp 65—79.

Brock, P and L Rojas Suarez (2000): “Understanding the behaviour of bank spreads in Latin
America”, Journal of Development Economics, vol 63, pp 113—134.

Claessens, S and L Laeven (2004): "What drives bank competition? Some international
evidence", Journal of Money, Credit and Banking, vol 36, 3, 563-583.

Claessens, S, N Coleman and M Donnely (2018): "Low-for-long interest rates and banks’
interest margins and profitability", Journal of Financial Intermediation, forthcoming.

Claeys, S and R Vander Vennet (2008): “Determinants of bank interest margins in Central and
Eastern Europe: a comparison with the west”, Economic Systems, vol 32, 2, pp 197—216, June.
Demirguc-Kunt, A and E Detragiache (1999): “Monitoring banking sector fragility: a
multivariate logit approach with an application to the 1996—97 banking crises”, World Bank
Policy Research Working Paper, no 2085, November. Demirguc-Kunt, A and H Huizinga (1999)

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International Journal of Marketing Strategies Vol 4,2: April 2012 by Goerg K. Amoako
(corresponding author)

APPENDIX – 1

Questionnaire Administered to Staff in Guaranty Trust Bank Sierra Leone Limited

53
Objective: Data are collected for research work and other this has no other purpose. The
information collected from respondents would be kept confidential.

Personal particulars

Name: -------------------------------------

Designation: ------------------------------------

Experience: -------------------------------------------

Sex: ----------------------------------------------

The values of scales are SA= strongly agree, A= Agree, N= Neutral, D= Disagree, SD= strongly
disagree

Direction: Tick only one option

SA. A. N. D. SD.
Q1. Does marketing strategies increase
profitability at GT bank
Q2. Does marketing strategy and service
improvement at GT Bank related
Q3. Is there a difference between GT Bank’s
profitability and its marketing strategies
Q4. Does sales promotion techniques at GT
Bank affects the customers buying behavior

Q5. Does the products GT Bank design

increase the profitability of the bank

APPENDIX – 2

Customer’s Questionnaire

54
Thank you for taking your precious time to complete this questionnaire, this will only take few
minutes to fill. You are assured that the information provided here will be strictly use for
research purpose. The objective of this questionnaire is to establish a relationship between Bank
and the Customer. Kindly fill in any of the box provided to each question by ticking.

Personal Profile

Gender: Male Female

Age: Below 18 18 to 25 25 to 35 Above 35

Educational Qualification: SSC INTER Graduate

Post Graduate Others

Occupation: Govt. Service Private. Service Agriculturist

House wife Own Business Professional Others

Q1. Have you banked with GT bank for long time? Yes No

Q2. If no, what have motivated you to bank with them now?

………………………………………………………………………………………………………
………………………………………………………………………………………………………

Q3 Do you believe in the employees (skill, competence and behavior) of the bank?

Yes No

Q4. Is the timing of service provided by the bank convenient? Yes No

Q5. Do you view the bank as one with a clear objectives to satisfy customers?

Yes No

Q6. If yes, are the mission and vision statements of the bank rightly define its commitment
towards you customers?

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………………………………………………………………………………………………………
………………………………………………………………………………………………………

Q7. Is the bank’s location comfortable to the public (can be easily reach)?

Yes No

Q8. If yes, what can you tell about its branches, are they sufficient and in suitable location to
attract more customers?
………………………………………………………………………………………………………
………………………………………………………………………………………………………

Q9. Are the products/services offered by the bank satisfactory? (Especially electronic)

Yes No

Q10. The prices (interest rate, charges) offered by the bank on various deposit, is it satisfactory
and competitive enough? Yes No

Q11. If yes, why?

………………………………………………………………………………………………………
………………………………………………………………………………………………............

Q12. Are you comfortable with the level of operation of the bank?

Yes No

Q13. If no, what are some facilities you wish to see the bank develop to retain you and attract
others customers?

………………………………………………………………………………………………………
………………………………………………………………………………………………………

Q14. Do you wish to continue with the bank as you are satisfied with it?

………………………………………………………………………………………………………
………………………………………………………………………………………………………

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