Effects of relationship marketing on commercial banks' performance in Kenya
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Date
2013
Authors
Njoka, Margaret Njoki
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
In today world of banking, banks are facing a lot of stiff competition both from within the sector
and outside. The customers are now more informed and their demands vary in complexity and
time. This intense competition has resulted in little or no differentiation among the products
being offered due to product imitation thus no bank can claim a substantive competitive edge
over another. Service quality is therefore very Key in order to create and sustain worthy
relationships with customers and also to keep abreast with their changing needs and behaviour.
Many commercial banks have therefore adopted relationship marketing in order to remain
competitive. The purpose of this study was to establish the effects of relationship marketing on
the commercial banks' performance in Kenya. The study aimed at understanding how customer
care management, employee empowerment and information technology affects the performance
of commercial banks in Kenya, it adopted a descriptive survey research conducted among the
commercial banks in Kenya. The study obtained data from 95 relationship managers from the
five (5) commercial banks that were purported to have had a relatively richer experience in
relationship marketing due to their large size and customer base. Collection of primary data was
through self-administered questionnaires with closed and open-ended questions. Secondary data
included bank publications, journals, and periodicals. Quantitative and qualitative data analysis
was employed to analyze the data collected. A research model was used in predicting the
relationship between relationship marketing and performance of commercial banks in Kenya.
The findings indicated a strong relationship between relationship marketing and banks
performance as all the variables were significant in explaining the relationship. The study thus
concludes that relationship marketing as measured by customer care management, employee
management and adoption of information technology has enhanced bank performance and thus
the three pillars of relationship management are Key if a bank has to perform. This is in line with
Gillespie and Hennessey (2007) who argued that good relationship management as a result of
relationship marketing leads to committed and loyal customers, thus increasing the purchases,
which in turn increase the profits of the company.
Description
Department of Business Administration, 54p. 2013, HG 1616 .M3N52