Relationship Between Marketing And Performance Of Banking Industry

2.0 Introduction

This chapter presents relevant literature to the topic under study. The Literature covers important definitions, relationship marketing benefits to business, the challenges of relationship marketing and performance of banks in the banking industry.

2.1 Marketing Defined

It is an undeniable fact that marketing plays an essential role in getting goods and services to the target audience on a daily bases. This is evident with the many adverts, directional offers, television commercial, sales calls, newspaper adverts, internet pitches among others. It is interesting to note that marketing goes beyond advertising and selling. Advertising and selling are just the tip of the iceberg. Though they are important they are only two of the many significant marketing functions (Kotler & Armstrong, 2004).

In recent times the understanding given to marketing has changed significantly and not only limited to “Telling and selling”. It actually goes beyond that and customer satisfaction at all levels is key. This will in the long run aid the marketer develop tailor-made solutions that provide extreme value and prices. Once this is done, effective distribution and promotion will help the products sell easily and customer retention will be assured. “Marketing is managing profitable customer relationship” (Kotler, 2004). Attracting new customers by promising superior value with the aim of keeping them and growing current customers through the delivery of satisfaction is the two fold goal of marketing.

Kotler earlier on defined marketing as a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others (Kotler, 1997). His definition...

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...g as a matching process between a company’s capabilities and the wants of customers”. Available resources and managerial skills differ from firm to firm which are not necessary capable of taking advantage of all marketing opportunities as effectively and competitively as other firms.

It is therefore obvious that customer wants and the matching process of the company’s capabilities is key to any commercial success. Czintota et al. (1997) stated that “marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfying individual and organizational goals”.

2.2 Relationship Marketing Definitions

The emergency of relationship marketing (Hennig, Thurau & Hanseen 2000; Gummesson 1999, Payne 1995, Gronroos 1994) is founded on a criticism of pure transaction focused marketing.