| Title : | Impact of promotional strategies on financial performance of Nepalese commercial banks | | Material Type: | printed text | | Authors: | Simanta Pandit, Author | | Publication Date: | 2016 | | Pagination: | 77p. | | Size: | GRP/Thesis | | Accompanying material: | 4/B | | General note: | Including bibliography
| | Languages : | English | | Descriptors: | Banks
Banks and banking
Promotion
| | Keywords: | 'promotional strategies return on assets return on equity personal selling' | | Class number: | 378.12 | | Abstract: | Promotion is the direct way that an organization attempts to reach its customers. It is performed through the five elements of promotion mix including advertising, sales promotion, personal selling, public relations, and direct marketing (Brassington and Pettitt, 2000). Market-focused organization first determines the potential customer’s desire, and then builds the products or services. Marketing theory and practice are justified in the belief that customers use a product or service because they have a need, or because it provides a perceived benefit (Tanko, 2006). Marketing is a driver of organizational positioning in a dynamic environment, and that it helps to enhance the development of new product/service for existing markets (Kotler and Keller, 2012). For the effective promotion, it is very essential to, identifying the customer’s financial needs and wants, develop appropriate banking products and services to meet customer’s needs, determine the prices for the products/services developed, advertise and promote the product to existing and potential customer of financial services, set up suitable distribution channels and bank branches, forecasting and research of future market needs (ShethandParvatiyar, 2012).
In the context of Nepal, banking industry has been characterized by strong competition with the continual increase in the number of banks (Koirala, 2006). After the entry of joint venture banks and then the burgeoning of Nepalese private banks with the new definition of and approach to banking, the whole banking industry in general are under the pressure to sustain their competitive position (Thapa, 2010). Banks are promoting the diversified functions of commercial banks; they needs to have integrated marketing efforts applied in all respects. Thus, enhanced marketing and market compatible strategies will not only reduce the problems of the banks but also provide cushion to meet the persisting challenges of the banking system. Only those banks will survive who face the competition with the effective ways of marketing (Uppal,2010). There exists a positive relationship between competitive strategies pursued by the banks and their organizational performance. The highest performance is correlated with cost strategy, followed by differentiation strategy, and market-focus strategy respectively.
The major purpose of this study is to analyze the relationship between promotional strategies and the financial performance of the Nepalese commercial banks. The specific objectives of this study are a) to investigate effect of advertisement on return on equity, return on asset and earnings per share in Nepalese commercial banks b) to analyze the effect of personal selling to return on equity, return on assets and earning per shares c) to examine the relationship of direct marketing on bank performance measured by return on assets, return on equity and earnings per share d) to determine the relationship of sales promotion with bank performance variables e) earnings per share (EPS), return on assets (ROA) and return on equity (ROE), and f) to examine the relationship of public relation with return on assets, return on equity and earnings per share.
This study has used primary and secondary sources of data to analyze the impact of promotional strategies on bank performance. The study was conducted in Kathmandu valley and 153 questionnaires survey has been accomplished for the study purpose. The secondary data for bank performance has been taken from annual report of the commercial bank for the year 2013/14.
This study has found positive relationship ofadvertisement, personal selling, direct marketing and sales promotionswith bank performance. The beta coefficientis found to be positive with return on assets but it is not significant at five percent level. The beta coefficient is also positive for direct marketing with return on equity. This indicate that higher the effort in direct marketing higher will be banking performance as measured by return on equity (ROE). The beta coefficient for advertisement is positive and significant at five percent with ROA. The result concludes that when bank launch different promotional campaign like advertisement, personal selling, direct marketing and sales promotion, banks become able to improve its return on assets (ROA) and return on equity (ROE). Likewise, earning per share of the bank is also positively affected by those promotional tools. Advertisement, personal selling and direct marketing campaign will be effective to improve the stockholders earning per share. This study also concludes that advertisement is most effective tools to reach the banking services to more customers followed by public relation and sales promotion. Trade shows is also effective for the sales promotion of the banking services. |
Impact of promotional strategies on financial performance of Nepalese commercial banks [printed text] / Simanta Pandit, Author . - 2016 . - 77p. ; GRP/Thesis + 4/B. Including bibliography
Languages : English | Descriptors: | Banks
Banks and banking
Promotion
| | Keywords: | 'promotional strategies return on assets return on equity personal selling' | | Class number: | 378.12 | | Abstract: | Promotion is the direct way that an organization attempts to reach its customers. It is performed through the five elements of promotion mix including advertising, sales promotion, personal selling, public relations, and direct marketing (Brassington and Pettitt, 2000). Market-focused organization first determines the potential customer’s desire, and then builds the products or services. Marketing theory and practice are justified in the belief that customers use a product or service because they have a need, or because it provides a perceived benefit (Tanko, 2006). Marketing is a driver of organizational positioning in a dynamic environment, and that it helps to enhance the development of new product/service for existing markets (Kotler and Keller, 2012). For the effective promotion, it is very essential to, identifying the customer’s financial needs and wants, develop appropriate banking products and services to meet customer’s needs, determine the prices for the products/services developed, advertise and promote the product to existing and potential customer of financial services, set up suitable distribution channels and bank branches, forecasting and research of future market needs (ShethandParvatiyar, 2012).
In the context of Nepal, banking industry has been characterized by strong competition with the continual increase in the number of banks (Koirala, 2006). After the entry of joint venture banks and then the burgeoning of Nepalese private banks with the new definition of and approach to banking, the whole banking industry in general are under the pressure to sustain their competitive position (Thapa, 2010). Banks are promoting the diversified functions of commercial banks; they needs to have integrated marketing efforts applied in all respects. Thus, enhanced marketing and market compatible strategies will not only reduce the problems of the banks but also provide cushion to meet the persisting challenges of the banking system. Only those banks will survive who face the competition with the effective ways of marketing (Uppal,2010). There exists a positive relationship between competitive strategies pursued by the banks and their organizational performance. The highest performance is correlated with cost strategy, followed by differentiation strategy, and market-focus strategy respectively.
The major purpose of this study is to analyze the relationship between promotional strategies and the financial performance of the Nepalese commercial banks. The specific objectives of this study are a) to investigate effect of advertisement on return on equity, return on asset and earnings per share in Nepalese commercial banks b) to analyze the effect of personal selling to return on equity, return on assets and earning per shares c) to examine the relationship of direct marketing on bank performance measured by return on assets, return on equity and earnings per share d) to determine the relationship of sales promotion with bank performance variables e) earnings per share (EPS), return on assets (ROA) and return on equity (ROE), and f) to examine the relationship of public relation with return on assets, return on equity and earnings per share.
This study has used primary and secondary sources of data to analyze the impact of promotional strategies on bank performance. The study was conducted in Kathmandu valley and 153 questionnaires survey has been accomplished for the study purpose. The secondary data for bank performance has been taken from annual report of the commercial bank for the year 2013/14.
This study has found positive relationship ofadvertisement, personal selling, direct marketing and sales promotionswith bank performance. The beta coefficientis found to be positive with return on assets but it is not significant at five percent level. The beta coefficient is also positive for direct marketing with return on equity. This indicate that higher the effort in direct marketing higher will be banking performance as measured by return on equity (ROE). The beta coefficient for advertisement is positive and significant at five percent with ROA. The result concludes that when bank launch different promotional campaign like advertisement, personal selling, direct marketing and sales promotion, banks become able to improve its return on assets (ROA) and return on equity (ROE). Likewise, earning per share of the bank is also positively affected by those promotional tools. Advertisement, personal selling and direct marketing campaign will be effective to improve the stockholders earning per share. This study also concludes that advertisement is most effective tools to reach the banking services to more customers followed by public relation and sales promotion. Trade shows is also effective for the sales promotion of the banking services. |
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