The Extent to Which Commercial Banks in Kenya Use the Promotion Mix Elements to Market Their Services

Abstract

The study reported here analyzed the extent to which commercial banks in Kenya utilize the promotion mix elements of advertising, sales pro motion, public relations and personal selling to market their services. The study also explored the factors that determine the use of the promotion mix and the problems encountered by the commercial banks in trying to promote their services. The basic premise of the study was that the success of any business in a competitive environment, depended to a large degree on the extent to which the organization is able to aggressively promote its services to the customers. The rationale for the study arose out of the fact that commercial banks in the Kenyan market are now facing stiff competition from.

other institutions as a result of changing customer requirements, technological changes and a changing banking environment following the recent trade liberalizations, decontrols and deregulation of interest rates. The study was a census survey of all the commercial banks m Kenya. Data was collected using a structured questionnaire and analyzed and presented using frequency tables, proportions and percentages. The Chisquare lest was used to test for association between the various categories of banks and the use of promotion mix elements. The findings from these analysis led to the following conclusions.- a) The most extensively used promotion mIX elements in the commercial tanking sector are personal selling and public relations. They are the key elements of-promotion in all the banks while sales promotion is the least used element. The promotion tools most commonly used to bring awareness to the public include advertising through the electronic and print media, sponsorship of sports activities, contributions and donations to "harambees" and public i~stitutions and give-aways such as calendars, ties or diaries. The findings also revealed that there is no significant relationship between the size, ownership and the period a bank has been in operation and the extent to which it uses promotion mix elements. b) The most important factors considered by banks when considering promotion mix elements to use are their company policies, type of service, type of customers, message and the cost of providing the service. c) The promotion of bank services in Kenya are hindered by lack .of skilled" staff, resistance to change, government restrictions, lack of awareness and competition, among others. These findings differ from problems encountered in other parts of the world such as in Western Europe and North Arnerica perhaps because of the different macro-environments. On the basis of these findings, the following managerial recommendations appear appropriate: a. Commercial banks should approach their marketing activities from both internal and external view points. Internally, they should train their employees, both management and support staff, to be customer-oriented. Integrated marketing must be practised so that both the management and staff aim at the same marketing objectives in the organization. The internal marketing activities will give support to the external marketing activities of adverusing, public relations, persof12l selling and sales promotion so as to achieve the bank objectives. b. Company policies should have long-term objectives which support marketing activu.es. These include the setting of promotion objectives, , media plannmg, end evaluation of promotion activities. They should also In-

elude the necessary budgetary support for the promotion activities. With the recent trade liberalization, removal of credit restrictions and deregulation of interest rates, the banking environment in Kenya will change drastically, as competition will be more pronounced. Commercial banks must, therefore, employ a more aggressive use of the promotion mix elements in their marketing activities in order to maintain their share of the market and increase or maintain their profit levels.