Strategic marketing innovation and bank performance in Nigeria

Abstract

To survive in the ever-increasing competition in the financial market, commercial banks need successful innovative strategies. However, there is insufficient information on appropriate innovative strategies required by banks. Primary data were obtained through a structured questionnaire. It was distributed among 1,200 bank employees and 300 bank customers of all eight systematically important banks (Access, Diamond, Eco, First, GTB, Polaris, UBA and Zenith) out of 21 deposit money banks in Nigeria as of December 31, 2016 by random sampling and stratified sampling techniques. The data were fitted to the regression-based model. The identified marketing innovation adopted by banks include innovative service provision (4.02), generation of new product with quality (3.65), entrance into new markets (3.60) and adoption of technological tools (3.57). Performance indicators considered are customer satisfaction and customer retention. Results showed that marketing innovation strategies of the banks significantly (p < 0.05) improve customer satisfaction. Improved service and product quality, introduction of new products and entrance to new market exert a positive and significant effect on outcomes of the banks. The estimated regression on customer retention showed that in a competitive environment, improved service exerts positive and significant (p < 0.05) influence. Furthermore, the impact of reduction in service cost is also positive and significant (p < 0.05), which is similar to the effect development of new banking products. The findings suggest that the pathway to raising performance of financial institutions in a competitive environment is diverse. There is a need for deployment of a modern banking technology, innovations around banking products and associated services.