The survey relationship between advertisement of the banking and financial performance in agriculture bank branches of Iran
Ghasem Ali RayejKafshGiri1 and Hossein Eslami Mofid Abadi2
1Master of Business Administration experts manage agricultural bank branches in Golestan Province, Iran.
2Department of Accounting, Science and Research Branch, Islamic Azad University, Semnan, Iran.
*Corresponding author. E-mail: . Tel: +989364301463.
ABSTRACT
The aim of this study was the survey relationship between advertisement of the Banks and financial performance in the Agriculture Bank branches of Golestan province. We are investigated the effectiveness of banks advertisement plansto finance performance and give recommendations considering the marketing approach of banks in target market. The research method is descriptive-analytical and besides describing statistical data, they are analyzed. In descriptive section, to achieve the research purposes and answering the research questions, the results of collected data of the questionnaire of statistical samples are expressed without any intervention or subjective inference qualitatively and quantitatively. To analyze research hypotheses by Analysis of Variance (ANOVA) test is used. The results of research show that, there is a significant relationship between advertisement of the Banks and financial performance in the Agriculture Bank branches of Golestan province. Moreover that, this result can be used by marketing manager in the bank to improve of the performance finance, special to attract of resource of money in the market and finance market.
Keywords:Advertisementof the banking, financial performance,agriculture bank branches of Iran.
1. INTRODUCTION
While advertising has traditionally been less important for industrial marketers than in consumer marketing, industrial marketers do utilize media such as news papers, magazines, and television as well, even if not to the samedegree (Aistrich, et al.,2006).Other communication vehicles, such as direct mail,are used extensively. As an ex ample, in Europe DellComputer Corporation and IBM market to individuals,small to medium business, large corporations and government segments. Their advertising and promotion efforts span all of these media (Aistrich, et al.,2006). The rise of Integrated MarketingCommunications (IMC) has further clarified the role ofthese media as ‘‘building up’’ throughout the marketingprocess to the moretraditional industrial marketing tool, thesales talk (Vitale & Giglierano, 2002).
Culture affects advertising in four ways (Seitz, 1998): the choice of advertising theme, the connotation of words and symbols, the way pictorial conventions are interpreted, and media selection. As the process of merging into a single market continues, marketers, particularly advertisers of multinational products, must concern themselves with presenting a unified brand image. However, given the importance of culture on the four basic advertising elements mentioned above, MN Cs must focus not only on the benefits of economies of scale when advertising but also on the needs of, and difference s in, their target market.The emergence of a single European market does not mean a market that is culturally homogeneous, which suggests that "Euro- ads" can be an expensive strategy with disappointingresults (Seitz, 1998). Indeed, differences andincoherent strategies still exist in the advertising and media environmentinthe EU (Wright & Morgan, 2002). A standardizedmarketing approach for the whole EU is still largely adistant expectation for most manufacturers (Aistrich, et al., 2006).
On the other hand, Planning is necessary for each economical activity, namely banks that as financial institutions should have exact and organized plan and adapt their activities according to the pre-determined plan. One of the necessary plans is marketing plan consisting of scientific studies and strategies via giving good bank services to customers and meeting the demands of market (Slomon,Jill.AndSolomoAirs.,2004). Today, marketing has wide dimensions and its important role in obvious in economical life of organizations (Stiglitz,J.E.1995).
Rapid changes of money and financial markets from traditional to over local regions and increasing the satisfaction of banks and financial institutions with the aim of increasing share of target market (Solomon,M.R,1994,pp:384-392 ), so, they were faced with the risk of losing or reduction of their share in target market. Thus, the banks should increase their share and keep their previous position and discover new markets in intense completion fields and they should find a way to increase this share besides removing the marketing and market management barriers.
Considering this issue and the important role that marketing mix and other marketing processes can have in increasing the attraction of banks resources, in this study, we investigate the effectiveness of advertisements of Agriculture Bank branches of Golestan province as one of state and specialized banks in Iran active in agriculture sector. Besides, the effect of coordination between advertisement plans of Agriculture bank in Golestan province with ethnical characteristics of people of this region and motivations and requirements of the customers in the current situation are considered. Regarding the role and importance of marketing mix, statistics were performed regarding the activities for marketing mix to promote the banks activities to attract the resources and its considerable share of total resources of the banks in Iran and prediction of annual growth rate prove this claim. Regarding the importance of the results of this research in investigating the effectiveness of advertisements of Agriculture Bank in Golestan province to attract these resources determined the necessity of this study.
2. LITERATUREREVIEW
2.1.What is marketing?
There exist today a wide variety of concepts of marketing and its nature. The very definitions of marketing have also undergone considerable development in the second half of the 2nd century, which is reflected in the literature mentioned below. Today we encounter several basic concepts of marketing and its nature. The five main marketing concepts are listed below (Hornik, Jacob., 1985,PP: 31-36).
First definition of our review referred to marketing as a system assuming that the center of gravity is with the producer and his point of view. Another definition which also dates back to the fifties clarifies the following for us: "Production means the concentration of raw materials in one place, while marketing means that this parcel of finished products is sent into farther and farther, far-flung regions"(Locley. C.L. and Dirksen. C.J.,1956, P.3). (Chaturvedi, J.N., 1959, P.3).
Another definition of the same period which stresses the passage from the producer to the consumer and also the importance of product-ion says the following: (Chaturvedi, J.N., 1959, P.3).
"Marketing in general may be defined as the whole process by which real marketable surplus, belonging to the producers, reaches the consumers." In the sixties we find a shift in perspective and the center of gravity of the marketing definitions in the literature on the subject. Researchers now find that the stress falls somewhere in the middle- between the producer and the consumer. The stress is now made on that mechanism which enables goods and services to pass on from the producer to the consumer.Ottenson and others (Ottenson, F.S. Panchar, W.G. and Patterson, J.M., 1966, P: 82).
explained that: "The firm is the bridge of decision-making between the market it series and the sources from which it buys. The buyer’s market constitutes the main source of income, whereas the selling market is the main absorber of the firm's outlays." We further find that in that decade of the 6's it was attempted to extend and refine the concept of marketing, in which the firm occupies a central position, and the following definition (Definition of R.A.,1969). tries to present a marketing model which describes price relations between different points in geographical space, different points in the time dimension, as well as between different alternatives based on the same raw material:"Prices in different geographical locations within the same country will differ by no more than the cost of transportation from one point to another, within one given marketing area. Prices will differ precisely by the cost of transportation from the point of production to the marketing location. Prices at one point in time will differ from prices at another point in time, precisely by the storage costs-The price of one product will differ from the price of another product manufactured from the same raw material, by the difference in processing costs." This concept also fits in with the discussion concerning the marketing of agricultural products and the role of the cooperative in this set-up. Indeed, a definition of marketing with preference to the agricultural system again stresses the importance of this marketing system as a link between producer and consumer(Mathur. B.S.,1971, P. 344):
"The performance of business activities directed towards, and incidental to, the flow of goods and services from producer to consumer or user." During the 80's the center of gravity of marketing definitions shifted from its former midway position between the producer and the consumer, to the side of the consumer.
2.2. Marketing process
2.2.1. Target consumers
If an institution wants to be successful in the present competitive market should focus on customer and attract the fans of rival companies by giving more value to the customers. But before satisfying the customer should understand their needs and requirements (Rusta, Venus, Ebrahimi, 1996, 104). Thus, a perfect marketing requires exact analysis of customers. Consumers are varied with different needs. Thus, institutions should divide the entire market into different segments, choose the best segments and formulate strategies to give profitable services better than their competitors formulate. This process includes three stages (Kotler, Armstrong, 2000,p:751).
2.2.2. Market segmentation (dividing the market)
The market is consisted of different kinds of customers, products and needs and marketer should determine which segments of market can provide the best opportunities for the organization in order that the organization achieve its goals. Considering the following factors consumers are divided and grouped: Geographical factors (country, zone, city); demographical factors (gender, age, income and education), psychological factors (social level, life style) and behavioral factors(purchasing characteristics, the advantages the buyer is looking for, consumption rate).
Market division process based on definite groups of buyers with different needs or behaviors and discrete products or marketing mix is called “market segmentation” (ibid, 2000,p: 817) that is shown in chart (1) of marketing process.
2.2.3. Market targeting
Market targeting is assessment of attractiveness segments of market and selecting one or some segments to enter. The organization should target the segments of market that brings the highest value for the customer and keep it for a long-term period. Limited resources of organization oblige it to enter only one or some segments of the market.
2.2.4. Market positioning
Positioning means differentiating a product as obvious in the mind of the required consumers considering the products of rival companies. Thus, positioning is started effectively when an institution supply something, it should have real difference in comparison with rival institutions and brings more value for customers.
2.2.5. Marketing mix
Marketing mix is “a set of controllable tools of marketing that company mix them to respond the target market”. These are classified to 4ps (product, place, price, promotion), four words starting with P. In chart (1), these marketing tools are presented; the tools are briefly explained here:
1. Product:This element is the most important variable in marketing mix of bank. As giving service to the customer is done in all the branches, the role of authorities and staffs of the banks is very important.Exact identification of customers need and giving suggestions to create new services and innovation are activities that are done in most branches.
2. Price:In bank marketing, price is manifested in one form of interest rate, exchange cost or fee. But most of marketing experts believe that this element is not very important for other variables of bank marketing. In the investigations, it was defined that rapid service and its quality and respectful behavior from the staffs of the bank are of great importance for bank clients.
3.Place: In bank marketing; place is decoration of bank and external face and good design of internal sections, using advance tools and taking caution in selecting handsome staffs and kind namely, in the places that are in direct contact with customers are important issues in this regard. Also, using posters and advertisement boards in customers view and providing facilities for clients, even their friends such as armchair in waiting room, air conditioning device, water dispenser, public telephone and other similar cases that help creating a good image of bank in the mind of customers and create good environment to increasing efficiency of staffs.
4. Promotion: This refers to all the activities that inform the advantages of bank service and encourage target customers to achieve them. This phenomenon in bank marketing is consisted of four activities advertisement, direct post, sale promotion and personal marketing.
a. Advertisement: The importance of this activity is to the extent that even big companies such as Coca-Cola, Sony or Toyota with all their fame in global level need its exceptional characteristics and dedicated considerable money to advertisement. This scope is extended to the presentation of bank activities and now we observed various manifestations of advertisement in different media.
b. Direct post: Direct post is low cost method but it is the most effective method to transfer information of bank service to “target customers”. In this method, important people and famous families are identified and advertisement forms are directly posted to their address. These forms should be designed carefully and they should have good and suitable text.
c. Sale promotion: sale promotion is an activity in which short-term motivations of customers are raised to be inclined toward a special service. This aspect of promotion operation due to eliminating “loyalty” of the customer and considering “instance motivations” are considered less from applied aspect because its inclination to “sale” concepts are nearer to its inclination to “bank marketing”.
d. Personal marketing (personal sale): Personal marketing is direct relation that is done to meet the demands of customers at bank level. In this regard the important thing for the chiefs and staffs of bank is total awareness of bank services and exact recognition of customers needs (ibid, 93, 2008-92).
2.3. Agricultural Bank activities in Iran
The main goals of Agricultural Bank is providing credit facilities for better life in villages and improving income of villagers and increasing agriculture productions, creation and development of small and traditional industry location in rural areas and participating in related activities.
Financial resources of Agricultural Bank are provided from different resources including capital, credits received from other banks, Qarz-Al-Hasanah Savings Account, state and personal current accounts and other demand deposits, time deposits, and collections that are explained as briefly in chart 3 (Mohammad Soltan Mohammadi, 2001).
The present study is of applied type and in terms of data collection is of library and survey type, the data is collected by questionnaire and is completed by 60 bank customers. Research method is of descriptive-analytical method and besides describing statistical data, they will be analyzed. In descriptive section, to achieve research goals and answering research questions, the results of collected data of the questionnaire of statistical samples are expressed without any intervention or subjective inference qualitatively and quantitatively. Sample population in this study is all customers of Agricultural Bank at Golestan province level. As research at total level of sample population is not possible due to spatial distribution of the members of the population and many budgets and time, it was decided to do the research at sample level and then to generalize the results to total population by statistical methods.
Considering the questions in this research and our consultations with lecturers and experts and staffs of Agricultural Bank, it was decided to consider sample size as randomly 60 people. Thus, total names of Agricultural Bank branches in Golestan province are coded (42) and marketing attributes are coded by 1 to 20 people and bank experts from 1 to 7 people. Then, by random table and the coding of 60 people randomly among customers, 42 branches of Agricultural Banks were selected in Golestan province and questionnaire was sent to them. In this section of descriptive analysis, at first personal specifications of the study samples (population of Agricultural Bank customers in Golestan province) including age, education and experience of customers is used and then data description and question and answers of questionnaire and finally the results of statistical research is used because for research hypotheses or data analysis, Analysis of Variance or (ANOVA)Single Facto is used and to achieve the research results, this formula or inference statistic technique are used for research results.
2.3. Review of Literature
Various researches were carried out regarding the effective factors on bank resources and attracting the deposits in Iran banks and even as a case study on some of the commercial banks of Iran, but a few researches are done in this regard in abroad. In the following, a foreign research and some of the researches which were performed in Iran are explained.
In a study by Marjan Foruzandeh (2000), the effect of advertisement in increasing the deposits in commercial banks with three hypotheses is investigated. The results of the investigation showed that 1- Advertisements are not effective on demand of the society to use bank, telephone bank services. 2. Advertisement by commercial banks increased their long-term investment deposit 3- Advertisement by commercial banks increased their short-term investment deposit (Foruzandeh, Marjan, 2000, p:2).
Hassan Moquinejad investigated the most important factors in increasing deposits from customers view tha is one of the valuable capitals of the bank and they were identified and test. These factors in the form of 5 variables including improving social relations of staffs with customers, good personal characteristics of staffs, advertisement, paid interest and presenting good services are classified and then tested. The results of this research show that 1- from customers view, improving social relations of staffs with customers increase deposits in the bank branches. 2- From customers view, good personal characteristics of staffs with customers increase deposits in the bank branches.3- from customers view, advertisements don’t increase deposits in bank branches. 4- From customers view, giving good services do not increase deposits in the bank branches. 5- From customers view, giving good services increases deposits in the bank branches. A research was done by Monetary and Economic Department (2006). In this comprehensive research, banking system condition was investigated from deposit flow and the volume of financial resources in Iran (Monetary and Economic Department,2006).