Download integrated marketing communication and performance of kenya post

INTEGRATED MARKETING COMMUNICATION AND PERFORMANCE OF
KENYA POST AND SAVINGS BANK
BY
ROSE JEMUTAI CHERUIYOT
D53/CTY/PT/22122/2012
A RESEARCH PROJECT SUBMITTED TO THE SCHOOL OF BUSINESS IN
PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF
THE DEGREE IN MASTERS OF BUSINESS ADMINISTRATION
(MARKETING OPTION) KENYATTA UNIVERSITY
MAY 2014
DECLARATION
This research project is my original work and has not been presented for a degree in any
other university or for any other award.
Signature………………………………
Date……………………………………
Rose Jemutai Cheruiyot
D53/CTY/PY/22122/2012
This research project has been submitted for examinations with my approval as the
university supervisor.
Signature…………………………………
Date…………………………………
Mr. Philip Wambua.
Lecturer, Business Administration
Signature……………………….. Date………………………
Dr. Stephen Muathe
Chairman of Business Department, School of Business Administration.
ii
ACKNOWLEDMENT
I am grateful to the Almighty God for granted me good health understanding mind and
strength to move on, without his blessings, it would not be possible. In addition, my
gratitude goes to my supervisor Mr. Philip Wambua for the support, patience, and
constructive criticism. His detailed comments and insightful suggestions sharpened and
strengthened my focus throughout this study.
Also I wish to acknowledge my employer, Postbank, for the material support that I have
been accorded to undertake this course, lastly I thank my family and colleagues for the
continuous support.
iii
DEDICATION
I would like to dedicate this project to my loving husband Dr. Mwenda and my daughters
Ivana and Jebet for the patience, understanding and consistent support in my endeavor to
finalize this project.
iv
ABSTRACT
This study examines the Integrated Marketing Communication and Performance of Post
Office Savings Bank Nairobi. Integrated marketing Communication is an integral factor
in the success of any firm and therefore a great deal of professionalism is required of the
provider due to ever-increasing competition. It‟s no longer enough to use Traditional
advertising but it requires integrated marketing communication where all
tools of
communication mix was integrated to bring results of performance, a lot has been done
to build a strong focused by creating awareness, improving sales, branch expansion,
customer loyalty
and recruiting of new customers through the use of integrated
marketing communication. The main objective of the study is to find out whether
Advertising, Sales Promotion Personal selling; Direct Marketing and Public relation is
used to improve performance in the bank. Data from 80 employees was analyzed to
determine Integrated Marketing Communication and performance. The research design
was descriptive in nature. Stratified proportionate random sampling technique was used
to select the sample. From each stratum the study used simple random technique to select
80 respondents. Data collection instrument was using questionnaires with both closed and
open ended questions. The data was analyzed using descriptive and inferential statistics
and presented using tables, graphs, pie charts. SPSS v. 20 was used to process the data.
Findings show that advertising, direct marketing, personal selling, sales promotion and
public relations enhance the company‟s performance by enhancing customer attraction,
customer loyalty, sales volumes, branch expansion and reminding customers of the
bank‟s products. The study recommends that management take seriously strategies that
can improve the execution of these IMC tools as they are crucial to performance of the
company.
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TABLE OF CONTENTS
DECLARATION ................................................................................................................ ii
ACKNOWLEDMENT ...................................................................................................... iii
DEDICATION ................................................................................................................... iv
ABSTRACT ........................................................................................................................ v
TABLE OF CONTENTS ................................................................................................... vi
LIST OF FIGURES ........................................................................................................... ix
LIST OF TABLES .............................................................................................................. x
LIST OF ABBREVIATIONS ............................................................................................ xi
CHAPTER ONE: INTRODUCTION ................................................................................. 1
1.1
Background of the Study ...................................................................................... 1
1.1.1
Organizational Performance ......................................................................... 3
1.1.2
Historical Background of Postbank .............................................................. 4
1.2
Statement of the Problem ..................................................................................... 6
1.3
Objectives of the Study ........................................................................................ 7
1.3.1
General Objective ......................................................................................... 7
1.3.2
Specific Objectives of the Study ................................................................... 7
1.4
Research Questions .............................................................................................. 7
1.5
Significance of the Study ..................................................................................... 8
1.6
Limitations and Delimitation of the Study ........................................................... 8
1.7
Scope of the Study................................................................................................ 9
CHAPTER TWO: LITERATURE REVIEW ................................................................... 10
2.1
Introduction ........................................................................................................ 10
2.2
Theoretical Review ............................................................................................ 10
2.2.1
Theory of Reasoned Action ........................................................................ 10
2.2.2
Theory of Dagmar ....................................................................................... 10
2.2.3
Theory of Persuasion .................................................................................. 11
2.3
Empirical Review ............................................................................................... 12
2.3.1
Advertising .................................................................................................. 12
2.3.2
Direct Marketing ......................................................................................... 13
2.3.3
Sales promotion .......................................................................................... 15
2.3.4
Public Relations .......................................................................................... 16
2.3.5
Personal selling ........................................................................................... 17
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2.4
Government Policy............................................................................................. 19
2.5
Monetary Policies ............................................................................................... 19
2.6
The Benefits of Integrated Marketing Communications .................................... 20
2.7
Integrated Marketing Communications and Performance of the Organizations 20
2.8
Summary and Gaps to be Filled ......................................................................... 22
2.9
Conceptual Framework ...................................................................................... 23
CHAPTER THREE: RESEARCH METHODOLOGY ................................................... 25
3.1
Introduction ........................................................................................................ 25
3.2
Research Design ................................................................................................. 25
3.3
Target population ............................................................................................... 25
3.4
Sampling Technique and Sample Size ............................................................... 26
3.5
Data Collection Instruments ............................................................................... 26
3.6
Validity ............................................................................................................... 27
3.7
Reliability ........................................................................................................... 27
3.8
Data Analysis ..................................................................................................... 28
3.9
Ethical Consideration ......................................................................................... 29
3.10
Expected Output ................................................................................................. 29
CHAPTER FOUR: RESULTS, ANALYSES, AND DISCUSSIONS ............................. 30
4.1
Introduction ........................................................................................................ 30
4.2
Reliability test analysis....................................................................................... 30
4.3
Return Rate......................................................................................................... 30
4.4
Biodata Analysis ................................................................................................ 31
4.4.1
Gender ......................................................................................................... 31
4.4.2
Department of Work ................................................................................... 31
4.4.3
Length of Service ........................................................................................ 32
4.4.4
Employees‟ Salary Income ......................................................................... 33
4.4.5
Position Held............................................................................................... 33
4.5
Descriptive Findings Analyses ........................................................................... 34
4.5.1
Marketing Communication Tool that will Increase Performance ............... 34
4.5.2
Advertising .................................................................................................. 35
4.5.3
Direct Marketing ......................................................................................... 40
4.5.4
Sales Promotion .......................................................................................... 45
4.5.5
Public Relation ............................................................................................ 53
4.5.6
Personal Selling .......................................................................................... 60
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4.6
Objective Tests and Analysis ............................................................................. 65
4.6.1
Advertising .................................................................................................. 65
4.6.2
Direct Marketing ......................................................................................... 68
4.6.3
Sales Promotion .......................................................................................... 69
4.6.4
Public Relation ............................................................................................ 71
4.6.5
Personal Selling .......................................................................................... 72
4.6.6
Performance of Integrated Marketing Communication Tools .................... 73
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS .................................................................................................. 77
5.1
Introduction ........................................................................................................ 77
5.2
Summary of Findings ......................................................................................... 77
5.2.1
Advertising .................................................................................................. 77
5.2.2
Direct marketing ......................................................................................... 77
5.2.3
Sales promotion .......................................................................................... 78
5.2.4
Public relation ............................................................................................. 78
5.2.5
Personal Selling .......................................................................................... 79
5.3
Conclusions ........................................................................................................ 79
5.3.1
Advertising .................................................................................................. 79
5.3.2
Direct marketing ......................................................................................... 80
5.3.3
Sales Promotion .......................................................................................... 80
5.3.4
Public Relation ............................................................................................ 80
5.3.5
Personal Selling .......................................................................................... 81
5.4
Recommendations .............................................................................................. 81
5.5
Recommendations for Further Study ................................................................. 81
REFERENCES ................................................................................................................. 83
APPENDICES .................................................................................................................. 86
APPENDIX I: CRONBACH‟S TABLE ....................................................................... 86
APPENDIX II. INTRODUCTION LETTER .............................................................. 88
APPENDIX III: QUESTIONNAIRES.......................................................................... 89
APPENDIX IV:TIME FRAME .................................................................................... 98
APPENDIX V: BUDGET ............................................................................................. 99
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LIST OF FIGURES
Figure 2.1: Conceptual Framework .................................................................................. 24
Figure 4.1: Length of service in present department ........................................................ 32
Figure 4.2: Position Employees Hold ............................................................................... 34
Figure 4.3: Marketing Communication Tool to Increase Performance ............................ 35
Figure 4.4: Advertising Increases Sales Volumes ............................................................ 37
Figure 4.5: Aggressive Marketing Enhances Branch Expansion...................................... 38
Figure 4.6: Advertising reminds customers to purchase Post bank‟s products ................ 39
Figure 4.7: Management plays an adequate role in advertising Post Bank ...................... 40
Figure 4.8: Direct Marketing Attracts New Customers .................................................... 42
Figure 4.9: Direct marketing enhances branch expansion ................................................ 44
Figure 4.10: Direct marketing reminds customers of banks products .............................. 45
Figure 4.11: Employees perception of sales promotion.................................................... 46
Figure 4.12: Sales Promotion Leads to Branch Expansion............................................... 50
Figure 4.13: Sales Promotion Improves Performance ...................................................... 52
Figure 4.14: Management uses sales promotion frequently ............................................. 52
Figure 4.15: Effect of PR on customer loyalty ................................................................. 54
Figure 4.16: PR has led to branch expansion .................................................................... 56
Figure 4.17: Effect of PR on Customers‟ Purchasing ....................................................... 57
Figure 4.18: PR has improved Post Bank‟s image ........................................................... 58
Figure 4.19: Employee perception of PR. ......................................................................... 59
Figure 4.20: Personal selling increases sales .................................................................... 61
Figure 4.21: Effect of personal selling on bank‟s performance ........................................ 63
Figure 4.22: Personal selling persuades customers to buy from Post Bank ..................... 64
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LIST OF TABLES
Table 3.1: Target population ............................................................................................. 26
Table 4.1: Cronbach‟s Alpha Result ................................................................................. 30
Table 4.2-Cronbach‟s alpha if questions deleted .............................................................. 86
Table 4.3: Gender of Respondents .................................................................................... 31
Table 4.4: Department of Work ........................................................................................ 31
Table 4.5: Employees‟ Salary Income .............................................................................. 33
Table 4.6: Advertising enhances customer loyalty ........................................................... 36
Table 4.7: Advertising Attracts New Customers .............................................................. 36
Table 4.8: Advertising Creates Awareness ....................................................................... 38
Table 4.9: Direct marketing improves customer loyalty .................................................. 41
Table 4.10: Direct Marketing Enhances Sales Volumes .................................................. 43
Table 4.11: Direct marketing enhances awareness on the bank ....................................... 44
Table 4.12: Reasons for the perception on sales promotion ............................................. 47
Table 4.13: Customer response during sales promotion ................................................... 48
Table 4.14: Effect of sales promotion on loyalty.............................................................. 48
Table 4.15: Sales Promotion Improves Sales ................................................................... 49
Table 4.16: Sales promotion creates awareness ................................................................ 51
Table 4.17: Ways of enhancing performance of sales promotion .................................... 53
Table 4.18: Public relation attracts new customers .......................................................... 55
Table 4.19: Extent of effectiveness of PR on sales volume .............................................. 55
Table 4.20: Reasons why PR is poor ................................................................................ 59
Table 4.21: Ways of improving current PR ...................................................................... 60
Table 4.22: Effectiveness of personal selling in enhancing customer loyalty .................. 61
Table 4.23: Effectiveness of personal selling on Post Bank‟s products ........................... 62
Table 4.24: Ways of improving personal selling .............................................................. 65
Table 4.25: Correlation results on advertising and performance ...................................... 66
Table 4.26: Correlation of Direct Marketing and Performance ........................................ 68
Table 4.27: Correlation Results between Sales Promotion and Performance .................. 70
Table 4.28: Correlation between Public Relations and Performance ............................... 71
Table 4.29: Correlation between Personal Selling and Performance ............................... 72
Table 4.30: Model Summary ............................................................................................ 74
Table 4.31: Coefficientsa................................................................................................... 74
x
LIST OF ABBREVIATIONS
AAR
Africa Air Rescue
IMC
Integrated Marketing Communications.
SPSS
Statistical Package for Social Science.
POSTBANK
Kenya Post Savings Bank
GOZ
Government of Zimbabwe.
GOK
Government of Kenya
PR
Public Relations
IMC
Integrated Marketing Communication
USA
United State America
S.A.Y.E
Save As You Earn
DAGMAR
Define Advertising Goals for Measured Advertising Results.
ATM
Automated Teller Machine
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CHAPTER ONE: INTRODUCTION
1.1
Background of the Study
Over the past decade, understanding the conceptual and strategic ramifications of
integrated marketing communications (IMC) has become an increasingly important topic
in both the academic and advertising communities. Broadly defined IMC is a concept of
marketing communication planning that recognizes the added value of using a
comprehensive plan to evaluate the strategic role of variety of communication disciplines.
It combines these disciplines to provide clarity, consistency, and maximum
communication impact (Peltier, Schibrowsky, & Schultz, 2003).
Integrated marketing communication is the strategic coordination of all marketing
messages and the alignment of methods of communication to customers be they
consumers or other targeted, relevant (external and internal) audiences, Palgrave, M
(2000). Integrated marketing communication is defined as customer centric, data method
of communication with the customer. Most organizations in Kenya are not implementing
integrated marketing communication and that is why they are having many challenges in
terms of their market.
Schultz, in Jones (1999) defines IMC as „a planning approach that attempts to coordinate, consolidate and bring together all the communications messages, programmes,
and vehicles that affect customers or prospects for a manufacturer or service
organization‟s brands‟.
Integrated Marketing communication has evolved as marketers have moved away from
traditional mass media based communications strategies, towards those that are most
personalized, customer-oriented and technology-driven (Palgrave, 2000). Marketing
communications helps to define an organization‟s relationship with its customers. This
emphasizes the strategic importance of such communication and its long-term effect on
consumers. Communication models act as predictive guides, but in the end it is important
to recognize the autonomy and unpredictability of consumers (Messah & Immaculate,
2011).
1
Integrated marketing communication is a concept on marketing communication planning
that recognizes the added value of a comprehensive plan that evaluates the strategic roles
of variety of communications disciplines for example general advertising, direct
marketing, sales promotion and public relations combines these disciplines to provide
clarity, consistency and maximum communication impact (Eagle & Kitchen, 2000). In
the case of New Zealand they have moved from a highly regulated economy post-1945 to
one of the word‟s least regulated economies by the late 1980‟s. The deregulation mostly
occurred following the victory of labour 1984.
Subsequently, advertising of new deregulated imported products grow at a phenomenal
rate with some advertising campaigns producing questionable results. Integrated
marketing communication has been implemented in much larger markets. In some
countries, experienced industries are dominated by multinational organizations for
example McDonald & Cadbury are highly visible markets. In Newzealand, organizations
generally have substantive international shareholding. However, in Kenya integrated
marketing communications are used by companies like Kenya Airways, Safaricom etc.
but local companies do not use IMC.
In the case of Zimbabwe, they believe small and medium enterprise play a major role in
both developing and developed world (GOZ, 2009). According to Kotler (2005), there
have been very few studies conducted in relation to the relevance, significant and
meaning of marketing communications in the context of small and medium size
enterprise. This situation may have changed over the years but still the case in the context
of SMEs in Zimbabwe. The management of SMEs do not emphasize the promotion of
goods and services. There is no proper planning in promoting their product and services
(GOZ, 2009).
Lahti and Beyerlein (2000) argue that marketing communications (MC) tools can create
competitive advantage, boost sales and profits, while saving money, time and stress. MC
wraps communications around customers and helps them move through the various
stages of the buying process. The organization simultaneously consolidates its image,
develops a dialogue and nurtures its relationship with customers. This 'Relationship
2
Marketing' cements a bond of loyalty with customers, which can protect them from the
inevitable onslaught of competition. The ability to keep a customer for life is a powerful
competitive advantage (Messah & Immaculate, 2011)
1.1.1
Organizational Performance
According to Richard et al. (2009), states that organizational performance encompasses
three specific areas of firm outcomes, that is financial performance, return on assets,
return on investment are involve in that organizational performance. Secondly, product
market performance where sales, market share are involve and lastly shareholder return
where total shareholder return, economic value added are involved.
In Tanzania, microfinance sector has recently experienced tremendous growth due to the
increased number of firms engaging in microfinance services including commercial
banks and other profit oriented firms(Kipesha, 2013). The microfinance mostly focused
on financial performance of the institutions in terms of efficiency sustainability and
profitability (Kipesha, 2013). They compare the achievement of the organization with
intended objectives that was achieved. The microfinance have coherent mission,
strategies and objectives which are in line with how their achievement are measured
(Kipesha, 2013).
In USA, College of Business Administration, department of management and marketing
have been dealing with logistic performance on organizational performance in a supply
chain. According to (de Kluyver & Pearce 2006), the ultimate goal of strategy is longterm, sustaining, and superior performance. Such superior performance now depends on
the ability of manufacturing organization to become a fully integrated partner within a
supply chain context (Cooper et al, 1997).
Manufacturing organizations adopt a supply chain strategy. Such supply chain strategies
focus on how both internal and external business process can be integrated and
coordinated throughout the supply chain to better serve ultimate customers while
enhancing the performance of the individual supply chain member (Cohen & Roussel,
2005). An example of business process that must be integrated include manufacturing,
3
purchasing, selling, logistics and the delivery of real-time seamless information to all
supply chain level, which requires a new focus and new ways of managing (Lambert et
al., 1998). Manufacturing managers must learn to communicate, coordinate, and
cooperate with supply chain partners (Gammalgaard &Larson, 2001). Organizational
managers are asked to focus attention and resources directly on supply chain function
such as logistic to boaster the competitiveness of the supply chains.
Locally, organizations today undergo some structural, operational, and business strategic
change with the aim of improving their performance. In pursuit of the goal of
performance improvement within the public sector, new public management emphasis on
the adoption of private sector practices in public institutions. New public models have
therefore been invariably seen through the public service reform initiatives in many
developing countries as the solution reversing failing services delivery. Kenya introduced
performance contracting not only to improve service delivery but also to focus the mind
set of public service away from a culture of inwards looking towards a culture of
introducing of performance management of corporate objectives, customer orientation
and increased focus toward incremental productivity and cost reduction can lead to
improvement in service delivery (Obongo, 2014).
The emphasis of this shift in public management was on maintaining a macro-economic
stability, lowering inflation, cutting deficit spending, and reducing the scope and cost of
government.
1.1.2
Historical Background of Postbank
According to GOK 1978 Kenya post office savings bank was establish under the act of
parliament (the Kenya post office saving bank act cap493 B laws of Kenya).The bank
was incorporated in 1978 and was under ministry of finance. Postbank started its
operations in 1910 and placed under the management of the East Africa Post and
Telecommunications, which operated as agents of the government. Postbank was formed
in 1977 and Kenya formed its own new government savings bank in the name of Kenya
4
post office savings bank and at the same time formed the posts and telecommunications
corporation.
The bank uses postal corporation as their agents and have identified their own agents
which are almost all over the counties. The bank‟s mission statement is to encourage and
facilitates savings and provides financial services to their customers and other
stakeholders (Kenya Post Office Savings Bank, 2008).
The bank has done a lot in the innovation in terms of introduction of Automatic
machines (ATM) which replaced the yellow passbooks. Postbank has the best saving
product which is called Save As You Earn (S.A.Y.E) which was introduced in 1978 and
its common with the discipline forces, teachers and public service employees, the bank
offers fixed accounts like premium saving and fixed deposit account which earn some
interest on it. Its offers money transfer services both locally and internationally by
sending and receiving transaction for the customer. The bank also introduced mobile
banking and named it PataCash which assist customers to deposit and withdraw cash by
use of their mobiles (Kenya Post Office Savings Bank, 2008).
Postbank visa card is one of the old product in the market and so far it is not doing well at
the moment because the bank are not aggressively advertising, many customers do not
know about it .Postbank Visa is experiencing challenges of competition, many banks now
days has visa card and they are really advertising the product. Another challenge is,
Postbank debit card are not visa labeled, and comparing with other banks where all debit
cards has visa labeled cards hence Postbank as an organization need to improve their
debit card (Kenya Post Office Savings Bank, 2008).
Salary account is one of the product which is not doing well because the bank at the
moment are not offering loans to their customers so many customers does not see a point
why they should process their salary and not getting any benefit from the bank. The bank
also does a lot of commission based business where they are given a percentage of the
work done. Example of commission companies are Safaricom,Citibank,pension of Kenya
,money gram and western union (Kenya Post Office Savings Bank, 2008).
5
1.2
Statement of the Problem
Proctor & Kitchen (2002) state that in marketing communication, there has been a shift
in emphasis from emphasizing the individuality of advertising, sales promotion, personal
selling and public relation to movement towards integrated marketing communication. In
the case of Kenya Post Savings Bank, IMC has not been accepted and as a result of this
the bank is experiencing a lot competition in banking sector. This competition has forced
Post bank to loss most of their customers to other banks and microfinance (Kenya Post
Office Savings Bank, 2008). According to Proctor and Kitchen (2002), questions have
been raised concerning the organization itself as a brand rather than individualism brand
in its own rights. Post bank itself is a brand, which the bank has not rebranded it by
embracing new technologies like the introduction of Automated Teller Machines (ATM),
which the bank took a lot of time to install in the branches. Customers who could not
cope up with this automation, those who were used to the manual Post Bank passbook
opted to get there services elsewhere.
Schultz and Kitchen (1997) argue that most marketing communications activities in the
past have focused on breaking down concepts and activities into even more finite
specialisms. Few marketing communications approaches have involved integration or
holistic thinking. Whilst it is acknowledged that the pace of change towards the adoption
of a holistic approach has been relatively slow, nonetheless, many practitioners and
clients have moved progressively towards IMC.
Smith (1996) states that „Integrated marketing communications is a simple concept. It
brings together all forms of communication into a seamless solution. At its most basic
level, IMC integrates all promotional tools so that they work together in harmony.‟
Fitzgerald (2000) States that the argument against IMC challenges, the approaches are
being nothing more than traditional marketing and advertising dressed up in new clothes
and given a new title. Such an argument suggest that integrated is nothing new, that it
revolves around an academic argument and has few real managerial implications.
6
Studies have been done and found that many organizations are shifting from normal
marketing communication to IMC secondly; most marketing activities in the past have
focused on breaking down concept and activities into even more fine specialisms.
Thirdly, IMC brings together all forms of communication into a seamless solution and
finally, argument against IMC challenges the approaches as being nothing more than
traditional marketing and advertising dressed up in new clothes and given a new title,
however no researcher has researched the case of Postbank. The researcher took a keen
interest on how IMC improves performance in Post Bank.
1.3
Objectives of the Study
1.3.1
General Objective
The broad objective of the study was to establish the relationship between integrated
marketing communication and the performance of Post Office Savings Bank (Post Bank)
1.3.2
Specific Objectives of the Study
The study seeks to specifically
i)
To find out the effect of advertising on performance of Postbank
ii)
To establish effect of direct marketing on performance of Postbank
iii)
To determine whether sales promotion are the best communication tool on
performance of Postbank.
1.4
iv)
To find out the effect of public relation on performance of Postbank
v)
Determine how personnel‟s selling has effect on performance of Postbank.
Research Questions
The study was guided by the following questions
i) Does advertising of Post Bank products affect performance of the bank?
ii) Does direct marketing affect performance of Post Bank?
7
iii) Does Sales promotion the best communication tool on performance of Post Bank?
iv) Does public relation affect performance of Post Bank?
v) Does personnel selling affect performance of Post Bank?
1.5
Significance of the Study
Integrated marketing communication allow the organization to market their products by
creating awareness hence there will be increase in sales volume. The Organization
corporate image will be improved because most customers will like to associate with a
leading organization in terms of communication. Image is everything for companies to be
in business, without good image customers lost hope and they will not want to be
associated with an organization, which has a problem with the image.
Integrated Marketing communication motivates employees to work very hard in order to
achieve their targets. Good communication helps employees to work as a team and this
will enhance high productivity, like for sales people they are able to sale the product
because every customer is aware with Postbank products. Good integrated marketing
communication improve staff morale, especially those who work in the marketing
department, these means that the employees will be willing to work very hard to meet
customers.
Good integrated marketing communication helps customer to be informed of new
products, they will be informed incase of systems change and finally be informed of new
processes in the bank. Integrated marketing allows the government to get revenue in
terms of ledger fees and maintenance fees.
To researchers, this study is a useful source of information for related studies in future.
1.6
Limitations and Delimitation of the Study
The ability of the sample respondents to give accurate information considering that, they
had already formed perception on Post Bank‟s products. The researcher overcame this
limitation by involving every member of staff in choosing new products in the bank.
8
Time is another challenge. The students were given more time to do the research.
1.7
Scope of the Study
The study was carried out in Head Office where employees were targeted in the
following departments: marketing, operations, supplies and human resources. The
researcher preferred the study to be done in Head office because of the accessibility of
the employees. The researcher aimed to get the opinion of all the departments in the
bank.
9
CHAPTER TWO: LITERATURE REVIEW
2.1
Introduction
These sections explore the relevant theoretical, empirical studies, the benefit of integrated
marketing communication, integrated marketing communication, and performance of the
organizations, Summary and gaps and finally conceptual framework.
2.2
Theoretical Review
2.2.1
Theory of Reasoned Action
Godin,(1994) argued that the primary goals of the theory of reasoned action are to
understand and therefore predicts social behaviors. To do this, the behavior must be
clearly specified, under rational control and performed in a given situational. In addition,
an assumption is made that the immediate and sole determinant of the behavior in
question is the intention to perform or not to perform that behavior. Consequently, this
theory interprets social behavior at the level of individual decision-making.
According to Godin,( 1994) the theory of reasoned action the proximate determinants of
the intent to adopt a given behavior are the individual‟s personal attitude towards
behavior are individual‟s personal attitudes towards performing the behavior of social
factors towards the performances of the behavior.
2.2.2
Theory of Dagmar
Dagmar is a marketing theory used to measure the results of an advertising campaign.
The theory involves setting specific, measurable objectives for a campaign to determine
if specific objectives were met. Specifically, Dagmar seeks to communicate a specific
message through four steps: awareness that is making the consumer aware that the
product or company exists, secondly comprehension - letting the consumer know what
the product are used for third, Conviction - convincing the consumer to purchase the
product and lastly Action - getting the consumer to actually make the purchase .
10
According to Karisson,(2007) argued that the created Dagmar when he prepared a report
for association of National Advetisors. Thus report was entitled defining advertising
goals for measured advertising results, shortened down to Dagmar, and therefore of the
name (Belch &Belch, 1995) and was later in 1969 published as a book with the same title
(Mackay, 2005). Dagmar was created to encourage measurable objectives for each stage
of the communication (Smith & Taylor, 2002). Dagmar focuses on the level of
understanding that a customer must fulfiled for the organization and on how to measure
the result of an advertising campaign (Belch & Belch, 1995). The Dagmar theory has had
a huge influence on how to set objectives in the advertising planning process and many
planners used these models as their base .However just as the other theory within
advertising, Dagmar has been met with critique. One of the major critisms towards
Dagmar is on its reliance on the hierarchy –of-effects theory, just as with AIDA
.Customer do not always pass through the stages in a linear way.
The main conclusion on the Dagmar theory was expressed in the following quotation all
commercial communications that weigh on the sale must carry a prospect through for
level of understanding that the prospect must first be aware of the existence of a brand or
an organization. Secondly, he must have a comprehension of what the product is and
what do for him. Thirdly, he must arrive at a mental suspicion or conviction to buy the
product and finally he must stir himself to action (Mackay, 2005).
2.2.3
Theory of Persuasion
Understanding the effect of advertising -- whether positive or negative -- on its audience
is the focal point of persuasion theory. The general notion of persuasion has led to
advances in other aspect of attitudes and persuasion research that have strong input on
marketing and advertising research. Attitude certainly tends to increased when people
perceived themselves as resisting a persuasive communication Shrum, L. J., Min Liu,
Mark Nespoli, and Tina M. Lowrey (2012),In the case of Postbank persuasive of
customer has to be done in the media or can be done by any mode of communication.
11
2.3
Empirical Review
2.3.1
Advertising
According to kevin et al. (2009), advertising is any paid form of non-personal
communication about an organization, good service or idea by an identified sponsor. The
paid aspect of this definition is important because the space for the advertising message
normally must be bought.
Borden (1964) argued that advertisement deals with policies and procedures related to
amount to spend for example the burden to be placed on advertising and copy platform to
adopt product image desired and corporate desired and finally mix of advertising to the
trade through the trade to consumers. He then concluded that advertising attracts new
customers to a company besides enhancing customer loyalty, as it seeks to make the
brand well known to people.
Perreault (2000) states that advertising seeks to promote the seller‟s products by means of
publicizing them through different kinds of media like printed and electronic. This is
justified on the grounds that messages can reach large numbers of people and make them
aware and persuade and remind them about the firm‟s offerings. From a marketing
management perspective, advertising is an important strategic device for maintaining a
competitive advantage in the marketplace. Advertising budgets represents a large and
growing element in the cost of goods and service (Kotler &Armstrong, 2005). The use of
interactive media in the market place is experiencing explosive growth. Unfortunately,
high expectations have been replaced by disappointment with many companies becoming
increasingly skeptical as to when, if ever, their interactive media efforts will turn
profitable (Korganjor, 1999).
The American marketing association has adopted the following definition: Any paid form
of non-personal presentation and promotion of ideas, goods, or services by identified
sponsor (Michael J.Baker 1991). Setting advertising objectives should be based on the
past decision about the target market, positioning and marketing mix which defines the
job that advertising must do in the total marketing program (Perreault, 2000). An
12
advertising objective is a specific communication task to be accomplished with a specific
target audience during a specific period of time. Advertising objectives can be classified
by primary purpose whether the aim is to inform, persuade, or remind. Informative
advertising is used heavily when introducing a new product category by building primary
demand. Some persuasive has become comparative advertising, in which a company
directly or indirectly compares its brand with one or more other brands. Reminder
advertising is important for mature products –its keeps consumers thinking about the
product (Kottler, 2011). It is very relevant to any organization “Advertising mass media
has made Advertising to be more precise, has played a major role in business to consumer
marketing and enabled companies to meet communication and other marketing
objective”(Minh Hou Poh Adan, 2007). A study by Aliata et al. (2012) established that
the amount spend in advertising has a statistically significant relationship with the
performance of national bank of Kenya measured by profits. This study also aims to
establish the direction that relationship takes for the case of Post bank. The bank should
be having mass media advertisement that will help it improve productivity and
performance.
2.3.2
Direct Marketing
Kotler & Armstrong (2004) argued that direct marketing is the use of consumer direct
channels to reach and deliver goods and service to customer without using marketing
middlemen. These channels include direct mail, catalogs, telemarketing, interactive
television, kiosk, websites, and mobile devices. It consists of direct connections with
carefully targeted individual consumers to both obtain an immediate response and
cultivate lasting customer relationships. Direct marketers communicate directly with
customers, often on one-to-one, interactive basis. Using detailed database, they tailor
their marketing offers and communications to the needs of narrowly defined segments or
even individuals buyers (Kotler & Armstrong, 2004).
Direct marketing if well planned and executed effectively it has the potential to be more
cost effective than other promotional tools because of the precise targets that the
technique allows. Existing customers can be contacted to introduce them to new products
13
and special offers, hence, affecting their loyalty while the new customers can be
identified and encouraged to purchase products are services of a firm through direct
channels (Van der Merwe, 2003).
According to Peter & Donnelly (1998), Direct marketing has been consumers „increased
use of the internet for purchasing many products. Direct marketing activities are often
very effective in generating sales leads when a customer asks for more information about
a product or service. Beyond brand and image building, direct marketers usually seek a
direct, immediate, and measurable consumer response. For example, Dell computer
interacts directly with customers, by telephone or through its web site, to design built –toorder systems that meet customers individual needs. Direct marketing consist of direct
communications with carefully targeted individual consumers to both obtain response and
cultivate lasting customer relationships. Direct marketing communicate directly with
customers, often on a one to one, interactive basis. Using detail databases, they tailor
their marketing offers and communications to the needs of narrowly defined segments or
even individuals (Kottler, 2006).
Direct marketing is convenient, easy to use, and private, that is from the comfort of their
homes, and they browse mail catalogs or company websites. Direct marketing to the
sellers is powerful tool for building customer relations using database marketing. Today‟s
marketers can target small groups or individual consumers, tailor-offers to individual
needs and promote these offers through personalized communications. Direct marketing
can offer a low-cost-efficient for reaching their markets for example; direct marketing has
grown rapidly in B2B marketing, partly in response to ever-increasing costs of marketing
through sales force (Kottler, 2006).
Brubaker (2007) states that direct marketing ethical
activities can be best fostered
through leading with moral courage by creating an ethical business environment for
direct marketing, efforts to make a conscious commitment that you and the organization
will accept and adhere to high standards by adopting, leading with moral courage, hiring
and promoting the right people and creating an ethical culture.
14
2.3.3
Sales promotion
Stanton et al. (1994) define sales promotion as a demand –stimulation devices designed
to supplement advertising and facilitate personal selling. Sales promotion may be
conducted by producers and middlemen. The target for producers‟ sales promotions may
be middlemen, end users-households or business users-or the producers‟ own sales force
(Peter & Donnelly, 1998). Middlemen direct sales promotion at their sales people or
prospects further down the channel of distribution. Sales promotion today in Kenya, is
well used on fast moving commodities also other industry should embrace the aggressive
used of sales promotion.
Perreault (2000) noted that sales promotion includes a wide assortment of tools–coupons,
contest, cents–off deals, premium, and others - all of which have many unique qualities.
They attract consumer attention, offer strong incentive to purchase, and be used to
dramatize product offers and boost sagging sales promotions invite and reward quick
response-where advertising says “buy our product”, sales promotion “says buy it now”.
Sales promotion effects are often short –lived, however, and often not as effective as
advertising or personal selling in building long-run brand preference (Kotler, 2011). In
fact, studies like Aliata et al. (2012) found a statistically significant relationship between
sales promotion and performance. They established that sales promotion enhanced brand
preference, which then enhanced brand performance hence high profits/performance.
Two reasons for this increased popularity are undoubtedly the increased pressure on
management for short –term results and the emergence of new purchase tracking
technology. Push and pull marketing comprise the two options available to marketers
interested in getting their product into the hands of customers. Push strategies involve
aiming promotional efforts at distributors, retailers, and sales personnel to gain their
cooperation in ordering, stocking, and accelerating the sales of a product. Pull strategies
involve aiming promotional efforts directly at customers to encourage them to ask the
retailer for the product (Peter & Donnelly, 1998).
15
Stanton et al. (1994) talked about selecting the appropriate techniques in promotional
devices, which include one, the nature of the target audience where they expect the target
group to be loyal to the brand, secondly, the nature of the products, which lend itself to
sampling, demonstration, or multiple –item purchase. Thirdly, cost device where
sampling to a larger market may be prohibitively expensive.
Kerin et al. (1992) emphasis on the advantages of sales promotion is that the short-term
nature of these programs (such as a coupon or sweepstakes with an expiration date) often
stimulates sales for the duration. Offering value to the consumer in terms of a cents-off
coupon or rebate may increase store traffic from consumer who are not store –loyal. Sales
promotion cannot be the sole basis for a campaign because gains are often temporary and
drops off when the deal ends. Advertising support is needed to convert the customer who
tried the product because of a sales promotion into a long-term buyer. According to
Warren J. Keegen (2002), sales promotion refers to any consumer or trade program of
limited duration that adds tangible value to a product or brands.
2.3.4
Public Relations
Etzel et al. (2007) emphasize that Public relations is a management tool designed to
favorably influence attitudes towards an organization, its products, and its policies. It is
an often overlooked form of promotion. Management lack attention to public relation
because the organizational behavior are not responsible of the marketing department its
normally handle by small public relations department that reports directly to top
management. Secondly, inadequate definitions which are used loosely by both businesses
and the public organization; thirdly unrecognized benefits only recently have many
organizations come to appreciate value of good public relations. As the cost of
promotions have gone up, firms are realizing that positive exposure through the media or
as a result of community involvement can produce a high return on the investment of
time and effort.
Public relation is any form of commercially significantly news items about organizations,
goods, medium that is not paid for by the sponsor, it is news carried in the media by the
16
editor or reporter, and which has significant news value (Ayozie 1992). Public Relations
is the management function that establishes and maintained mutually beneficial
relationships between organizations and public (Cutlip et al., 2000).
Kerin (2009), states that public relations is a form of communication management that
seeks to influence the feelings, opinions or beliefs held by customers, prospective
customers, stock holders, suppliers, employees and other publics about a company and its
products or services. Public relations is a non-personal form of communication that tries
to influence the overall image of the organization and its products and services among its
various stakeholder groups. The aim of PR is to achieve customer loyalty, attract new
customers, enhance the purchase of the company‟s products or services, and enhance the
general acceptance the company commands in the society. Public relations managers
prefer to focus on communicating positive news about the organization, but they must
also be available to minimize the negative impacts of a crisis (Kotler & Armstrong 2005).
There are several forms of publicity and they are news release that is an announcement
regarding changes in the organization or product line, sometimes calls a press release and
news conference, which involves meeting held for representatives of the media so that the
organization can announce major news events such as new products, technologies,
mergers, acquisitions and special events (Kotler, 2006).
“Public relations is the management function that establishes and maintains mutually
beneficial relations between organizations and the public on whom its success or failure
depends” (Cutlip et al., 2000). Sponsorship in Public relation providing support for and
associating the organizations „name with events, programs, or even people such as
amateur athletes or teams and also it allow
Public Service announcements. Many
nonprofit organizations reply on the media to donate time for advertising for
contributions and donors.
2.3.5
Personal selling
According to Etzel et al. (2007) personal selling is a direct communication between a
sales representative and one more prospective buyers in attempt to influence each other in
17
purchasing situation. According to Futrell (2008) Personal selling refers to the personal
communication where one unselfishly persuade a prospective customer to buy something
–a good or a service, an idea, or something else that satisfy the individual.
Personal selling is the most effective tool at certain stage of the buying process,
particularly in building up buyer‟s preference, convictions, and actions. It involves
personal interaction between two or more people, so each person can observe the other
needs and characteristics and make quick adjustments (Peter & Donnelly, 1998).
Kotler (2006), states that Personal selling also allows all kind of relationships to spring
up, ranging from matter –of-fact selling relationships to personal friendship. The
effective salesperson keeps the customer‟s interest at heart in order brings a long-term
relationship. Finally, with personal selling, the buyer usually feels a greater need to listen
and response is a polite “no thank you”. These unique qualities come at a cost. A sales
force requires a longer-term commitment than does advertising –advertising can be on
and off ,but sales force size is harder to change. Personal selling is also the company‟s
most expensive promotion tool, costing companies a lot of money (Dibb et al,2001) for
example in the bank the sales people need a car and time to go see a client. Yeshin (2012)
further adds that companies that effectively engage in personal selling enhance their
performance by way of increasing sales of the company‟s products. A study by Aliata et
al. (2012) on NBK sums up the relationship between personal selling and performance.
Aliata et al. (2012) found that personal selling significantly related with profits of banks
in a positive manner.
Personal selling is a form of person-to–person communication, in which a seller attempts
to assist and/or persuade perspective buyer to purchase the company‟s products and
service (Van der Merwe, 2003). Personal selling involves direct contact between buyer
and seller, which gives the market communication flexibility. This means that the seller
can see or hear the potential buyers reactions and modify the message.
Personal selling is any face-to-face promotion of the company and its products to the
customer‟s. Personal selling is commonly used by suppliers (manufacturers and
18
importers) to deal directly with retailers. Personal selling is the most effective tool at later
stages of buying process and three distinctive qualities are Personal confrontation
Personal selling involves an immediate and interactive relationship between two or more
persons. Secondly, Cultivation where personal selling permits all kinds of relationships to
spring up ranging up ranging from matter –of –fact selling relationship to a deep personal
friendship and finally, response where Personal selling makes the buyer feel under some
obligations for having listened to the sales talk (Dibb at el., 2001).
According to Kerin, (2009), personal selling is the two way flow of communication
between a buyer and a seller, designed to influence a person‟s or group‟s purchase
decision. According to (Perreault, 2005) The importance of personal selling is that the
clients can get more attention than advertisement or a display. The sales person can adjust
what they say or do to the prospect‟s interest, needs, questions, and feedback.
2.4
Government Policy
Monetary policy is the manipulation by the Government of interest rates and/or the supply of
money in an attempt to influence the economy, and such economic variables as growth
inflation and the balance of trade (Pandey, 2009). For example, when the government of
Kenya introduced women fund and youth fund the growth of the economy has grown
because they have been given the money to improve their business and borrow more loans
in the banks and as a result of the these the bank received more new customers hence the
sales volume increased and more so most customers will be loyal to the banks (Kenya Post
Office Savings Bank, 2008).
2.5
Monetary Policies
This is the direction of the economy through the variables of money supply and the price
of money. Expanding the supply of money and lowering the rate of interest should have
the effect of stimulating the economy, while a policy designed to reduce price and wage
inflation by requesting voluntary restraint or by imposing statutory controls contracting
the supply and raising the rate of interest should have a restraining effect upon the
economy (McLaney, 2006). In the case of Postbank monetary policies has assisted the
19
customers to access loans easily from banks. The government of Kenya has allowed all
banks and Sacco‟s to offer loans to customers so as result of this the customer preferred
to opened new accounts hence Postbank received new customers and open new branches
all over the country (Kenya Post Office Savings Bank, 2008).
2.6
The Benefits of Integrated Marketing Communications
The process of Integrated offers a great number of benefits to the companies which
adopt in Yeshin,(2012),suggest nine potential benefits of integrated marketing
communications as follows consistent messages ,creative integrate ,unbiased marketing
recommendation ,better use of media,greather marketing precision, operational efficiency
,cost savings,high-calibre consistent services and easier working relations. When the
bank adopt and used the above benefits they will be in a position to improve their
performance, increase their sales volume, they will be able to open more branches
because of creative integration.
Similarly, Yeshin, (2012),
identified series of benefits which could be done from
integrated marketing communication programs .This include increase creative ideas more
effective when IMC used,greather communications consistent ,increased importance of
one brand personality ,helps eliminate misconceptions ,provides clients with greater
professional experts enable greater clients control over marketing communication. This
benefits if practice it will improve the performance of the many companies. Postbank
should embrace the above benefits.
2.7
Integrated
Marketing
Communications
and
Performance
of
the
Organizations
Kotler & Amstrong (2005), states that during the past several decades, companies around
the world have perfected the art of mass marketing –selling highly standardized products
to masses of customers. In the process, they have developed mass media advertising
techniques to support mass-marketing strategies. The shifted from mass marketing to
targeted marketing, and the corresponding use of a larger, richer mix of communication
channels and promotion tool, poses a problem for marketers. Customers do not
20
distinguish between message sources the way marketers do. In the consumer mind,
advertising messages from different media and different promotional approaches all
become part of a single message about the company.
IMC builds brand identity and strong customer relationships by tying together all the
company‟s messages and images. Brand massages and positioning are coordinated across
all communication activities and media.IMC calls for recognizing all contacts points
where the customer may encounter the company, its products and brands .Each brand
contact will deliver a message, whether good, bad or indifferent. The company must
strive to deliver a consistent and positive message with each contact.IMC produces better
communications consistency and greater sales impact –it unify the company‟s image as it
is shaped by thousands of company activities ( Kotler & Amstrong 2005).
Kotler et al. (2006), Companies must allocate the marketing communications budget over
the six major modes of Communication – advertising, sales promotion, public relations
and publicity, events and experiences, sales force, and direct marketing. Within the same
industry, companies can differ considerably their media and channel choices. Avon
concentrates its promotional funds on personal selling, whereas Revlon spends heavily on
advertising. Companies are always searching for ways to gain efficiency by replacing one
communication tool with others. Many companies are replacing some field sales activity
with ads, direct mail, and telemarketing. One auto dealer dismissed his five salespeople
and cut his prices, and sales exploded.
Companies are shifting Advertising funds into sales promotion. The sustainability among
communications tools explains why marketing functions need to be coordinated. For
example, a new Web site and a coordinated TV ad campaign targeting the greater Los
Angeles area sparked record sales for Hawaii‟s Aloha Airlines, selling over one million
dollars worth of tickets on one day. The TV ads were designed to create awareness for
Aloha and drive traffic to the Web site, where the sale would be closed (Kotler et al.
2006).
21
Mutali (2011), however argued that customers need information about the features of the
product or service, its price and how they can access it, to make informed purchase
decision. Thus, if customers are able to get the necessary information about the product
timely and adequately, they may feel that they are buying quality product or service. This
means having good and effective marketing communication channels adds value to the
product or service of the company as customers have confidence in the choice of products
and services over competitors.
2.8
Summary and Gaps to be Filled
From the literature review it can be summarized that the following factors of integrated
marketing communication will improve performance in the bank
In theory of reasoned action it emphasis social behavior at the level of individual decision
making for example for every customer has to make a decision and purchase a product. In
the theory of Dagmar it is used to measure the results of advertising campaign thus the
theory is relevant to the study because it deals with creating awereness, communicate the
usage of the product, conviction to purchase the product and lastly to purchase the
product. The theory of persuasion deals with advertising where persuasion of customers
should be applied for them to purchase the product.
In the empirical review, Perreult (2000) states that advertising seeks to purchase the
sellers products by means of printed and electronic media, this study is applicable
because advertising is the marketing tool used to creating awareness. Kevin et al (2009)
emphasis that sales promotion is the short-term program promotion done to stimulate
sales hence stimulations leads to increase to sale volume.
In public relations (Kerin, 2009) states that public relations is a non-personal form of
communication that tries to influence the overall image of the organization. This study is
applicable because reputable companies influence repeat purchase of the products and
service. (Peter & Donnely 2007) argued that in direct marketing there is an increased use
of the internet for purchasing many of the products. Finally, in public relations (Etzel et
al 2007) states that personal selling is a direct communication between sales
22
representative and one prospective buyer in attempt to influence each other in purchasing
situation.
IMC has the following benefits to the organization in order to improve the performance
unbiased marketing recommendation, better use of media, high caliber consistent services
and working conditions. In conclusion, the company around the world have developed
mass media advertising techniques to support mass marketing strategies.
2.9
Conceptual Framework
The conceptual framework of the integrated marketing communication will be examined
as illustrated in the figure below .The independent variables are advertising, sales
promotion, personal selling, and public relations and direct marketing the dependable
variable are performance. If the independent factors are enhanced by the organization
there will be increase on customer base, sales volume will increase, and there will be
expansion of branches. There are some moderating factors, which affect the performance
of Postbank that is government policy and regulations where the act has to be amended
by members of parliament so the bank will be able offer loans to customers. Inflation
affects performance in that when the price of commodities is high it will affect the
purchase of goods and services. A monetary policy deals with direction of economy
through the variables of money supply and price of money for example when the
economy of Kenya improved customers are able to save their money in banks hence the
sales volume will increase and branch network will also increase.
23
Integrated Marketing Communication
Advertising sing
Organizational performance


Sales Promotion
Personal Selling


Direct Marketing
New customers
Increase in sales
volume
Branch expansion
Customers loyalty
Publicity or Public Relations


Independent Variables
Government Policy
Monetary policies
Moderating Variables
Figure 2.1: Conceptual Framework
24
Dependent Variable
CHAPTER THREE: RESEARCH METHODOLOGY
3.1
Introduction
This chapter describes the research methodology that was used to gather information, on
procedures to be adopted in conducting the research, the techniques used in analysis and
the presentation of data collected. This chapter therefore focuses on the research design,
population, and sample, sampling technique and data collection instruments and data
analysis applied during the study.
3.2
Research Design
This researcher used descriptive design. Descriptive designs are cover-research designs
that are intended to produce accurate descriptions of variable relevant to the decision
being faced, without demonstrating that some relationship exist between variables (Luck
& Rubin, 1992). The descriptive design enabled the researcher identify integrated
marketing communication and performance in post office Savings Bank. The design
enabled the researcher get to the root of the actual happenings and expected happenings
in IMC in order to make out a detailed report or assessment. This provided for a detailed
research, which in turn allowed a more comprehensive coverage of the organization
under study.
3.3
Target population
The study was done at Post Bank‟s head office. The bank has 1170 employees all over its
countrywide branches. The bank also has agents like the Postal Corporation of Kenya and
some private agents appointed by the bank. The agency services provide service in
remote places or those places where banking services are not available.
The study concentrated at head office, which has a total number of 450 employees. As
such, the target population was the 450 employees of Post Bank.
25
Table 3.1: Target population
Staff
Marketers
Operation officers
Other departments
Category
Senior
Junior
Senior
Junior
Senior
Junior
N
100
220
10
10
10
100
450
Total
Source Postbank HR Records (2014)
3.4
Sampling Technique and Sample Size
Stratified sampling technique was used to sample between senior and junior staff while
stratified proportionate random sampling technique used to select the sample. According
to Deming (1990), stratified proportionate random sampling technique produced
estimates of overall population parameters with greater precision and ensures a more
representative sample is derived from a relatively homogenous population. The
population was stratified into two, one group with 120 senior staff while the other with
330 junior staff.
The researcher then used simple random sampling to select 10 of senior staff and 70 of
junior staff as the sample size making the total size to b 80 employees of Post Bank.
According to Cooper and Schindler (2003), random sampling frequently minimized the
sample error in the population.
3.5
Data Collection Instruments
The data collection was done using questionnaires with the semantic differentiation
scales as the main part. The questionnaire included both open-ended and closed
questions. In this method, each person was asked to response to the same questions in a
pre-determined way. The questions in each questionnaire were unique to each of the
variables as they sought to establish how integrated marketing communications affects
performance of the Post Office savings bank. Gay (1992) maintains that questionnaires
26
gives respondent‟s freedom to express their views or opinion and to make suggestions.
The researcher used drop-and-pick method to deliver the questionnaires to respondents.
3.6
Validity
Validity is the ability of the instrument to measure what it aimed to measure “(Eriksson
& Wildershelm 1999). According to Gunnarsson (2002) the measurements that the
authors has taken to make sure that everything is relevant to the context in other works,
make sure that the research is valid. According to Mugenda and Mugenda (2003),validity
is the accuracy and meaningfulness of inferences, based on the research results. Content
validity is based on the extent to which a measurement reflects the specific intended
domain of content.
Construct validity seeks agreement between a theoretical and a specific measuring device
or procedure. Construct validity can be broken down into two sub-categories one is
convergent validity where the actual general agreement among ratings, gathered
independently of one another, where measures should be theoretically related for example
the integrated marketing communication should be interrelated. Both construct validity
and content validity were used. Construct validity was used in the study to ascertain
theoretical framework and content validity was used to ascertain clarity of research
instruments through the help of supervisors and expert opinion.
3.7
Reliability
Reliability is the extent to which an experiment, test, or any measuring procedures yield
the same results on repeated trials. Without the agreement of independent observers able
to replicate research procedures, or ability to use research tools and procedures that yield
consist measurements, researchers would be unable to satisfactorily draw conclusions,
formulate theories, or make claims about the generalizability of their research.
To test the internal consistency of the instrument, the study used Cronbach‟s Alpha,
which ranges between 0 and 1. Thus the closer the value of Alpha to 1, the more reliable
the results would be and the more it nears 0, the more unreliable the instrument or tool.
27
Where α – is the statistical tool, Cronbach‟s alpha
N - number of items,
C-bar is the average inter-item covariance among the items and
V-bar equals the average variance
Cronbach's alpha
Internal consistency
α ≥ 0.9
Excellent (High-Stakes testing)
0.7 ≤ α < 0.9
Good (Low-Stakes testing)
0.6 ≤ α < 0.7
Acceptable
0.5 ≤ α < 0.6
Poor
α < 0.5
Unacceptable
The calculated Cronbach‟s alpha for this study was 0.802, indicating high reliability in
the instrument used.
3.8
Data Analysis
Data collected from the various respondents in the group was classified and tabulated into
different categories according to their common characteristics; Data was analyzed using
descriptive and inferential methods and presented in tables, graphs and pie charts.
Statistical Package for Social Scientists (SPSS 20) was used to process and manipulate
the data into the desired analyses. In descriptive analyses, measures of central tendency
and frequencies were used to present information while inferentially, Pearson correlation
and regression were used to show the relationship the different IMC had to performance
of Post Bank.
The regression model applied in the study was:
28
Where y = performance of Postbank, „a‟ is the intercept and „ɛ’ is the error
X1 -Advertising
X2 – Sales Promotion
X3 – Personal Selling
X4 – Direct Marketing
X5 – Public Relations
And b1, b2, b3, b4 and b5 are coefficient on independent variables.
3.9
Ethical Consideration
The research gave attention to ethical issues associated with carrying out research. Some
of these issues included confidentiality where confidence and privacy of respondents‟
identity and responses was ensured. Information was not divulged to any third parties and
was not used, whatsoever, for any use other than academic. Participation was on
voluntary purposes and informed consent was highly sought. It is important to note this
research was not for personal gain and was not aimed at causing a negative effect on the
organization or individual participants. All works of other authors was also
acknowledged by the researcher in the reference section to avoid cases of plagiarism.
3.10
Expected Output
The research expected to collect findings that show a weak relationship between the
banks performance and the specific factors of IMC since the bank is not adequately
competitive to other players in the industry.
29
CHAPTER FOUR
RESULTS, ANALYSES, AND DISCUSSIONS
4.1
Introduction
This chapter presents the collected results, the analyses linked to the results and the
respective discussions and link to the literature review. The chapter is organized based on
the objectives under study. The first part of the study presents descriptive analyses while
the other part presents the regression results and analysis.
4.2
Reliability test analysis
When the study conducted a reliability test, the results presented in table 4.1 and table 4.2
were collected.
Table 4.1: Cronbach’s Alpha Result
Cronbach's Alpha
Cronbach's Alpha Based on Number of Items
Standardized Items
.802
.831
43
The calculated Cronbach‟s alpha for this study was 0.802, indicating high reliability in
the instrument used.
The specific item-statistics are as shown in table 4.2 (appendix I). This table shows that
deleting some of the questions will not result into enhanced reliability as the change in
the Cronbach‟s alpha will not be much.
4.3
Return Rate
The study targeted to collect responses from 80 employees of Post bank. However, the
collected questionnaires that could be analyzed were 50. This comprised a return rate of
62.5%, which, given it comprises majority of the targeted sample, was adequate to give
responses that would be generalized to the whole population.
30
4.4
Biodata Analysis
4.4.1
Gender
The gender of respondents was as shown in table 4.3.
Table 4.3: Gender of Respondents
Valid
Frequency
Valid Percent
Male
14
28.0
Female
Total
36
50
72.0
100.0
As table 4.3 shows, majority (72%) of the respondents to this study were females. This
indicates that the responses given are likely to incline towards a feministic point of view.
However, the fact that 28% of the population are males means that the masculine point of
view is also represented in the final feedback.
4.4.2
Department of Work
The study also investigated the departments respondents worked so as to establish how
much they were exposed to the issues being studied. The results are as shown in table 4.4.
Table 4.4: Department of Work
Valid
Frequency
Percent
Valid Percent
Customer service
2
4.0
4.0
Marketing
Operations
Others
Total
6
39
3
50
12.0
78.0
6.0
100.0
12.0
78.0
6.0
100.0
Majority of the respondents, 78%, were from the operations department. It is worth
noting that the operations department deals with the day-to-day operations of any
establishment. Thus, employees in the operations department can easily tell whether a
31
given strategy is leading the organization to the right direction or not. As such, these
employees can easily give the study feedback concerning the performance of marketing
strategies the company is engaging. Similarly, the other employees from the marketing
and customer relations department interact with marketing strategies and customers
respectively and, as such, can be able to access information on the marketing strategies
performance.
4.4.3
Length of Service
The study investigated the length respondents had served in their present departments; the
collected results are shown in figure 4.1.
Figure 4.1: Length of service in present department
Majority (36%) of the respondents had served in their present departments for over 15
years while only 28% had served for not more than five years. This shows that majority
of respondents had stayed in their departments long enough to encounter the happening
of events hence present a comprehensive and elaborate analysis of issues based on
experience.
32
4.4.4
Employees’ Salary Income
In a bid to understand employees better, the study investigated the salary bracket majority
of respondent employees belonged to. The findings were as shown in table 4.5.
Table 4.5: Employees’ Salary Income
Salary group
20,001-40,000
40,001-60,000
60,001-80,000
80,001-120,000
over 120,000
Total
Frequency
3
4
26
8
9
50
Percent
6.0
8.0
52.0
16.0
18.0
100.0
Majority of 52% of the respondents were paid between Ksh. 60,001 and 80,000, 16%
were paid over 80,000 but not more than 120,000 while 18% were paid over 120,000.
This indicates that majority of the employees were adequately compensated for their
duties in the bank (putting in mind the average payment for most Kenyans; not more than
40,000).
4.4.5
Position Held
The figure 4.2 shows the positions held by respondents at the time of the study.
33
Figure 4.2: Position Employees Hold
Thirty percent of the employees held the customer relations officer post, 26% were
supervisors, 18% were managers, and another 18% were tellers. All these positions offer
chances of the respondents interacting with customers and/or bank‟s services or products,
hence, offer chance for one to understand the bank‟s performance.
4.5
Descriptive Findings Analyses
4.5.1
Marketing Communication Tool that will Increase Performance
The study investigated the IMC tool that would enhance the performance of the bank.
The respondents gave results that were as presented in figure 4.3.
34
Figure 4.3: Marketing Communication Tool to Increase Performance
Majority, 47% of respondents argued that proper use of advertising was the main item the
bank needed to implement to enhance its performance. According to 17%, the second
strategy the bank needs is sales promotion, followed by direct marketing at 15%, personal
selling at 12% and lastly public relations at 9%. Given that majority put more emphasis
on proper use of advertising means that the company could be doing advertising but in a
wrong way, thus, proper use may lead to the expected results on performance.
Advertising has significant effect in creating brand publicity hence the results similar to
Borden's (1964) argument.
4.5.2
Advertising
The first objective of the study investigated the effect advertising has on the performance
of Post bank. The collected findings were as presented in the subtopics that follow.
4.5.2.1 Customer Loyalty
First, the study investigated whether advertising Post Bank‟s products improved customer
loyalty. Collected results are as presented in table 4.6.
35
Table 4.6: Advertising enhances customer loyalty
Valid
Not sure
Agree
Strongly agree
Total
Frequency
Valid Percent
7
28
15
50
14.0
56.0
30.0
100.0
Majority, 86% agreed that advertising enhanced customer loyalty of Post bank while 14%
were unsure of the effect. This finding is in concurrence to the one presented by Borden
(1964) who observed that advertising familiarized a firms brand to its present customers,
thus enhancing customer loyalty. One of the roles of advertising is to inform customers
and remind them of the availability of certain products that meet their needs so that the
customers may purchase them. As such, when the company advertises, more of its
employees are informed hence becoming loyal.
4.5.2.2 Attracting New Customers
The study also investigated whether advertising enhanced the bank‟s ability to attract new
customers. Table 4.7 shows the collected results.
Table 4.7: Advertising Attracts New Customers
Agree
Strongly agree
Total
Frequency
30
20
50
Valid Percent
60.0
40.0
100.0
Majority (100%) agreed that advertising attracts new customers to the bank. This may
result from the fact that advertising publicizes the bank and its products to potential
customers seeking the services hence luring them to join the bank. This finding also
concurs with the one presented by Borden (1964) that advertising publicizes the brand of
a firm, hence, making it known to new customers.
36
4.5.2.3 Increased Sales Volumes
The results in figure 4.4 concerns the effect advertising has on the sales volumes made by
post bank.
Figure 4.4: Advertising Increases Sales Volumes
Majority of 84% of respondents agreed that advertising increases the sales volumes that
Post Bank makes at any given moment. Given that advertising enhances customer loyalty
as well as attracts new customers, it certainly increases the volume of products the
customers buy from the company hence the high sales volumes. Similar finding to this
one was advanced by Perreault (2000) who established that advertising promoted the
seller‟s products by means of publicizing them hence increasing chances of selling the
products.
4.5.2.4 Branch Expansion
The study also investigated whether aggressive marketing allowed Post Bank to expand
its branches. The collected results are as shown in figure 4.5.
37
Figure 4.5: Aggressive Marketing Enhances Branch Expansion
Majority of 70% agreed while 6% disagreed that aggressive advertising allowed the
expansion of Post Bank‟s branches. Since advertising enhances attraction of new
customers and loyalty of present customers, it increases business for the bank. To
enhance service delivery to the ever expanding market as a result of advertising, the bank
then expands its branches.
4.5.2.5 Creation of Awareness
Concerning whether advertising creates awareness, the results in table 4.8 were collected.
Table 4.8: Advertising Creates Awareness
Valid
Not sure
Agree
Strongly agree
Total
Frequency
Valid Percent
8
11
31
50
16.0
22.0
62.0
100.0
38
Eighty-four percent of respondents agreed that advertising creates awareness on Post
Bank and its products. This is attributed to the fact that advertising publicizes the bank‟s
brand and its products hence making more people informed about them. This concurs
with the discussions by Borden (1964) and Perreault (2000) that advertising seeks to
publicize a brand. The finding also agrees with Kottler‟s (2011) discussion that
advertising has a primary objective of informing, persuading, and reminding customers of
a brand‟s products/services.
4.5.2.6 Reminds Customers to Purchase Products
The results in figure 4.6 shows responses concerned with whether advertising reminds
customers to purchase Post Bank‟s products.
Figure 4.6: Advertising reminds customers to purchase Post bank’s products
Majority (74%) of employees agree that advertising reminds customers to purchase Post
Bank‟s products. The remaining 26% were not sure. The view of majority emanates from
the fact that advertising makes known to potential customers the products Post bank
offers. As such, it reminds them of the products available that they need to consume just
as it was noted by Kottler‟s (2011) discussion that one of the primary goals of advertising
is reminding customers of a brand‟s products/services.
39
4.5.2.7 Management Role
The study also investigated whether the role management of Post Bank takes on
advertising is enough to enhance the performance of the bank. The collected results were
as presented in figure 4.7.
Figure 4.7: Management plays an adequate role in advertising Post Bank
Majority of 76% said that management of Post bank does not offer adequate advertising
of Post bank‟s products/services. Out of the remaining respondents, 20% agreed that
management‟s role in advertising the bank‟s products was adequate while the remaining
4% were not sure of the position to take. This result shows that as much as respondents
agreed that advertising was good for the company (as indicated in previous results under
this objective), the effort taken by the management was not adequate. Employees feel that
there is room for management to do more than what they do now.
4.5.3
Direct Marketing
The second objective established the effect direct marketing has on the performance of
Post Bank. Collected results were discussed in subsequent subtitles.
40
4.5.3.1 Direct Marketing and Customer Loyalty
As to whether direct marketing enhances customer loyalty in Post bank, the results in
table 4.9.
Table 4.9: Direct marketing improves customer loyalty
Valid
Disagree
Not sure
Agree
Strongly agree
Total
Frequency
Percent
3
11
33
3
50
6.0
22.0
66.0
6.0
100.0
Seventy-two percent of employees agreed that direct marketing enhances customer
loyalty for Post Bank. Only 6% disagreed with this position. Since direct marketing aims
to promote the products of Post Bank by letting customers know the advantages of the
products, it lures the customers to becoming loyal hence the results. This result is similar
to what Van der Merwe (2003) presented-that direct marketing is a toll through which
existing customers can be contacted to introduce them to new products and special offers,
hence, making them loyal.
4.5.3.2 Direct Marketing Attracts New Customers
Figure 4.8 shows responses on whether direct marketing attracts new customers.
41
Figure 4.8: Direct Marketing Attracts New Customers
Majority (82%) of respondents agreed that direct marketing of Post Bank‟s products
enhances the attraction of new customers. The remaining respondents were not sure. The
results by majority may be attributed to the fact that direct marketing enhances contact
between the bank and its potential customers hence triggering new customers to develop
attraction to the bank. This also concurs Van der Merwe (2003) observation that through
direct marketing new customers can be identified and encouraged to purchase products
are services of a firm.
4.5.3.3 Direct Marketing Enhances Sales Volume
Table 4.10 shows responses concerning the effect direct marketing has on sales volume
of Post bank.
42
Table 4.10: Direct Marketing Enhances Sales Volumes
Valid
Frequency
Percent
Not sure
7
14.0
Agree
Strongly agree
Total
35
8
50
70.0
16.0
100.0
Majority of 86% agree that direct marketing enhances sales volumes of Post bank while
the remaining 14% were not sure. Just like any other marketing tool does, direct
marketing informs and gives customers the reason to purchase the banks products hence
increasing demand which then enhances the sales volumes. This also concurs with Van
der Merwe's (2003) submissions that through direct marketing new products are
introduced to existing and new customers for purchase-an act that enhances sales. Peter &
Donnelly (1998) also presented similar findings by asserting that direct marketing is
effective in generating sales.
4.5.3.4 Direct Marketing gives Room for Branch Expansion
The study investigated whether direct marketing has any effect on branch expansion of
post bank. The results collected were as shown in figure 4.9.
43
Figure 4.9: Direct marketing enhances branch expansion
Sixty-six percent of the employees agreed that direct marketing allowed expansion of
post bank branches and 28% were not sure. This may be because of the increased
customer loyalty and attraction of new customers that direct marketing created.
4.5.3.5 Direct marketing enhances awareness of bank’s products
The table 4.11 shows results on whether direct marketing enhances awareness on the
bank‟s products.
Table 4.11: Direct marketing enhances awareness on the bank
Valid
Not sure
Agree
Strongly agree
Total
Frequency
Valid Percent
7
22
21
50
14.0
44.0
42.0
100.0
Eighty-six percent of the respondents agree that direct marketing enhances awareness on
the banks products. This shows that direct marketing, just like the other marketing
methods played its role of informing customers, thus, letting them know more about the
44
bank and its products just as Kotler and Armstrong (2004) and Peter and Donnelly (1998)
established in their studies.
4.5.3.6 Direct Marketing Reminds Customers of the Bank’s Products
Figure 4.10 shows results concerning whether direct marketing reminds customers to
purchase the products the bank offers.
Figure 4.10: Direct marketing reminds customers of banks products
Majority, 83%, of the respondents agreed that direct marketing reminded customers to
purchase the products that post bank offered. This indicates that this marketing tool has a
positive effect on influencing the purchasing behavior of customers. Kotler & Armstrong
(2004) and Kottler (2006) earlier replicated this result in their studies where they
observed that direct marketing created a one-on-one interactive communication channel
with the customer that reminded customers of the products a given firm is offering.
4.5.4
Sales Promotion
The third objective established the effect of sales promotion on the performance of Post
bank. The results were as shown in the subsequent subheadings.
45
4.5.4.1 Employees’ perception of sales promotion
The perception employees have towards sales promotion was investigated and the results
collected presented in figure 4.11.
Figure 4.11: Employees perception of sales promotion
Majority (56%) of employees only perceive sales promotion as fair, 24% consider it as
good and only 2% consider it excellent. Eighteen percent of the employees consider the
sales promotion carried out as poor. The fact that majority only perceive sales promotion
as fair means that most employees think that more needs to be done to make sales
promotion better. This result indicates that the sales promotion practiced in Post bank is
not adequately demand stimulating as Stanton et al. (1994) considered effective sales
promotion to be.
4.5.4.2 Reasons for the perception on sales promotion
The study further investigated the reasons for the perception on sales promotion and the
collected results presented as shown in table 4.12.
46
Table 4.12: Reasons for the perception on sales promotion
Good
Fair
Poor
Reason
Resp
onse
(%)
More vigor can be 20
added to better it
Reason
Resp
onse
(%)
It should be done 83
consistently
Reason
It is rarely used
Resp
onse
(%)
25
Employees
are 20
adequately included
Promotional
materials
inadequate
Poorly done
25
It is not done
50
It‟s done frequently
17
are
20
Creates awareness 20
hence
improves
business growth
More promotional 20
materials need to be
added
Majority, 83%, of respondents who said the perception of sales promotion was fair
argued that the reason for their perception was inconsistency. They considered that the
perception would be made better if the company made sales promotion a consistent
activity. This further confirms Stanton et al.’s (1994) justification that the promotion was
not adequately stimulating as it was inconsistent.
Majority, 50%, said that they perceived sales promotion poor because it was not done at
all. Those who had good perception on sales promotion gave several reasons for their
answers including: more vigor ought to be added to the current sales promotion. They
also said the perception was good because employees were fairly included and that
promotion was done frequently.
4.5.4.3 Customer Response during Sales Promotion
The study also investigated the response customers had towards sales promotion. The
collected results are as shown in table 4.13.
47
Table 4.13: Customer response during sales promotion
Valid
Frequency
Valid Percent
Negative
7
14.9
Positive
Total
40
47
85.1
100.0
Majority, 85% of employees said most customers had positive response towards sales
promotion. This means that customers appreciated the use of sales promotion as a
marketing tool, hence, the company could easily capitalize on this by making the strategy
widely used to reach customers. It also indicates that the sales promotion used in the
company was positive to customers. The result concurs Perreault (2000) argument that
customers appreciate positive sales promotion.
4.5.4.4 Sales promotion improves customer loyalty
Table 4.14 shows results on whether sales promotion improves customer loyalty.
Table 4.14: Effect of sales promotion on loyalty
Valid
I don‟t know
No
Yes
Total
Frequency
Valid Percent
3
12
33
48
6.3
25.0
68.8
100.0
Sixty eight percent of respondents agree that sales promotion enhances customer loyalty
of Post Bank while 25% disagree. Just like other marketing methods, sales promotion
informs customers the reasons why they need to consume more of the bank‟s products,
hence, making customers loyal. This finding concur with the one Kerin et al. (1992)
established- that offering sales promotion may increase store traffic and store loyalty
from consumer who were previously less store–loyal.
48
4.5.4.5 Sales Promotion Improves Sales
The study investigated whether sales promotion improves Post Bank‟s sales and the
collected results presented in table 4.15.
Table 4.15: Sales Promotion Improves Sales
Valid
Yes
Frequency
Valid Percent
47
100.0
Majority, 100% of employees who responded to this question agreed that sales promotion
improved the sales of the bank. This may result from the fact that sales promotion
publicizes the bank‟s products to potential and new customers, hence, leading to
increased purchase of the products/high sales. The finding tally Kotler‟s (2011)
observation that sales promotion tells customers „buy now.‟ The findings are also in
agreement with Peter and Donnelly's (1998) presentations that sales promotion involves
the push factors that accelerate sales and the pull factors that encourage customers to ask
for certain products they seek to buy.
4.5.4.6 Sales promotion leads to branch expansion
The figure 4.12 shows results as to whether sales promotion leads to branch expansion.
49
Figure 4.12: Sales Promotion Leads to Branch Expansion
Majority of 44% of respondents said that sales promotion leads to branch expansion
while 40% disagreed. Another 17% did not know the response. Just like any other
marketing strategy, sales promotion leads to increased customers/business hence creating
the need to expand to offer better services to available customers. This result is in
agreement with the fact that sales promotion enhances loyalty as it is from loyal
customers that the bank‟s business increases prompting expansion. This results is similar
to the one by Aliata et al. (2012) who argued that sales promotion enhanced brand
proliferation hence expansion.
4.5.4.7 Awareness Creation
The results in table 4.16 shows results concerning whether employees of post bank
agreed to sales promotion creating awareness of the bank and its products.
50
Table 4.16: Sales promotion creates awareness
Valid
No
Yes
Total
Frequency
Valid Percent
2
48
50
4.0
96.0
100.0
Majority, 96%, agreed that sales promotion creates awareness while 4% disagreed. This
means that sales promotion makes the expected impact by reaching to people and
informing them of the bank‟s products and services. This is true based on the
confirmation presented by Peter & Donnelly (1998) that some strategies of sales
promotion encourage customers to ask the retailer for the product--that is, they create
awareness.
4.5.4.8 Sales Promotion Improves Performance
The figure 4.13 shows that majority, 92% of respondents agreed that sales promotion
improves performance of Post Bank. A small percentage, 8%, disagreed. Given the fact
that sales promotion is aimed to increase customer‟s intake of Post Bank‟s products, an
increase in this intake will certainly result in better performance of the products, hence,
influence the performance of the bank. This findings also concurs with Peter and
Donnelly's (1998) findings that push factors of sales promotion involves engaging
distributors, retailers and sales personnel to have their cooperation in ordering, stocking,
and accelerating sales which are signs of enhanced performance.
51
Figure 4.13: Sales Promotion Improves Performance
4.5.4.9 Management uses Sales Promotion Frequently
Concerning whether management uses sales promotion frequently to enhance the
performance of the bank, the results in figure 4.14 were collected.
Figure 4.14: Management uses sales promotion frequently
52
Majority of 52% agreed that management of post bank uses sales promotion frequently.
Thirty-six percent disagreed while 12% did not know. This result indicates that managers
of post bank also appreciate the importance of sales promotion, hence the frequent use.
4.5.4.10
Ways through which sales promotion can improve performance
Employees were asked of the ways through which sales promotion can improve
performance and the results in table 4.17 collected.
Table 4.17: Ways of enhancing performance of sales promotion
Way of enhancing sales promotion
Frequency
Improve image of the bank hence increase impact of sales 1
promotion
Creating awareness of the bank and its products
1
Sales promotion should be used to try new products
1
Sales promotion be done regularly
5
Hire more qualified employees to perform the strategy
1
Offer inducement to sales promoters
2
All products should be promoted
1
Rewarding existing customers so as to attract business from 1
new customers
Increase time and awareness of sales promotion
1
Total
14
Percent
7
7
7
36
7
14
7
7
7
100
Majority of 36% argued that sales promotion ought to be done regularly to enhance its
effect on the company‟s performance. This may be attributed to the short-term effect
sales promotion has as was presented by Keegen (2002). Making the tool effective, then,
means deploying it at a high frequency such that it appears like a long continuous
promotional event.
4.5.5
Public Relation
The fourth objective investigated the effects of public relations on the performance of
Post bank. The subtopics that follow explain the collected results.
53
4.5.5.1 Public relations build customers loyalty
Figure 4.15 shows the findings of the extent to which public relations influences
customer loyalty.
Figure 4.15: Effect of PR on customer loyalty
Majority, 44%, of respondents said PR built customer loyalty to an average extent while
26% said it build customer loyalty to a large extent. This result also shows that PR‟s
influence on customer loyalty is just average and, therefore, more should be done to
enhance the effect of PR on customer loyalty. This finding could be influenced by Post
Bank‟s low investment in PR, which makes the effect on customer loyalty to be average.
This finding concurs with the one that PR is the management function that establishes
and maintains mutually beneficial relationships between organizations and public (Cutlip
et al., 2000). Kerin (2009) also found that enhancing customer loyalty is one of the aims
of PR.
54
4.5.5.2 Public relation attracts new customer
The study also investigated the effect PR has on the attraction of new customers and the
results collected presented in table 4.18.
Table 4.18: Public relation attracts new customers
Valid
Frequency
Valid Percent
Very large extent
9
18.0
Large extent
Average extent
No extent
Total
11
23
7
50
22.0
46.0
14.0
100.0
Majority, 46%, of respondents agreed that on an average extent PR in post bank attracts
new customers; 22% said public relations attracts new customers to a large extent while
18% said it attracts customers to a very large extent. This result also show that the
management of Post Bank had not done much to ensure that PR attracts customers to a
large extent. The findings by majority concur with that of Kerin (2009) who observed
that attracting new customers was one of the major aims of PR.
4.5.5.3 Public relations increase sales volume
Table 4.19 shows results on the effectiveness of PR on the sales volume Post bank
makes.
Table 4.19: Extent of effectiveness of PR on sales volume
Valid
Very large extent
Large extent
Average extent
No extent
Total
Frequency
Valid Percent
1
8
38
3
50
2.0
16.0
76.0
6.0
100.0
As indicated in the table, 76% of the respondents said that PR influences sales volume of
post bank to an average extent. This means that as far as the tapping of PR to enhance
55
sales volume is concerned, the bank has not made significant progress since PR only
influences sales volumes averagely. The finding here matches the one presented by Kerin
(2009) that one of the aims of PR is to enhance the purchase of the company‟s products
or services and enhance the general acceptance the company commands in the society,
which are key to increasing sales.
4.5.5.4 Public relations can lead to branch expansion
Figure 4.16 shows the results on the effect PR has on branch expansion of Post Bank.
Figure 4.16: PR has led to branch expansion
Forty-two percent of employees said that good PR enhanced branch expansion to a large
extent while 34% said it enhanced the expansion to an average extent. This means that
PR in Post Bank was ideally used to facilitate the expansion of branches. This may be
attributed to the fact that PR is used to present a positive image to the public so as to
attract many new customers and enhance loyalty that is crucial for branch expansion.
56
4.5.5.5 Public relations remind customers to purchase products
As to whether the PR practiced in Post Bank reminded customers to purchase the bank‟s
products, the results in figure 4.17 were collected.
Figure 4.17: Effect of PR on Customers’ Purchasing
Majority (60%) of employees said that to an average extent public relations reminded
customers to purchase the bank‟s products. Twenty percent said PR did not remind
customers to purchase Post Bank‟s products. This may also be attributed to the fact that
the extent to which PR is implemented in Post bank is low to adequately remind
customers to purchase the banks products. Just as Cutlip et al. (2000) puts it, the aim of
PR is to establish mutual relations between people and the organization. This relation
then enhance customers ability to purchase more from the organization (Kerin, 2009).
4.5.5.6 Public Relations Improves Bank’s Image
Figure 4.18 shows result on the extent of effectiveness to which PR has improved Post
Banks image.
57
Figure 4.18: PR has improved Post Bank’s image
Majority of 40% of employees note that public relations had increased post banks image
to a large extent while 32% said it had increased the bank‟s image to a very large extent.
Twenty-two percent said the bank‟s image had not been enhanced by PR. Public relation
creates better relationship between the bank and its customers, hence, improves the image
of the bank. The findings resemble those presented by Kerin (2009) that public relations
is a non-personal form of communication that influences the overall image of an
organization and its products and services among its various stakeholder groups.
4.5.5.7 Employee’s perception of PR
The study also investigated how employees perceived public relations as was offered by
Post Bank. The collected findings were as presented in figure 4.19.
58
Figure 4.19: Employee perception of PR.
Majority, 50%, of employees considered the public relations offered by Post bank as poor
while 39% considered the PR as well. This means that most of the employees were not
satisfied with how PR was carried out in Post bank; perhaps they felt that some basic
procedures in PR were not handled as required.
The reasons employees gave for terming PR poor are presented in table 4.18.
Table 4.20: Reasons why PR is poor
Reason for considering PR poor
Management are not always be in the media
Bank/management not keen on PR issues
PR is not active
The relevant department not doing enough
Total
Frequency
4
8
2
4
18
Percent
22
44
12
22
100
Majority of those who responded, 44%, argued that the reason why PR was poor in Post
bank was because management of the bank had not been keen on issues to do with PR.
This may be associated with low investment in PR or lack of such department as other
findings in this study has shown.
59
4.5.5.8 Alternative ways of improving public relations
The study then investigated whether employees had ways through which they could
recommend an improvement of PR. The results were as presented in table 4.19.
Table 4.21: Ways of improving current PR
Way of improving PR
Hiring, Training and deploying PR staff appropriately
Putting the bank‟s information on social media
Engage the media in all important functions like product
launch
Do a lot of CSR
Improve on how to handle customers (with promptness)
Advertise the company‟s good side more
Generate goodwill from customers/understand customers well
Involve customers in PR implementation so as to know and
meet their expectations
Total
Frequency
4
1
2
Percent
25
6
13
4
2
1
1
1
25
13
6
6
6
16
100
Majority (25%) of respondents said that hiring, training and deploying staff appropriately
to handle PR was the major reason towards improving PR in the company. This hints to
the fact that the company had not trained or hired well trained staff to deal with PR issues
hence the recommendation by employees. Another 25% said that the company ought to
do a lot of CSR as a way of enhancing its PR. This is attributed to the fact that companies
that do CSR appear as concerned firms that are interested in solving some of the society‟s
problems rather than just earn profit. As such, this involvement in CSR creates a good
image for the company hence alleviating its PR.
4.5.6
Personal Selling
The last objective investigated how effective personal selling is to the performance of
Post Bank. Results were also presented in subsequent subheadings.
4.5.6.1 Personal selling is effective in building customer loyalty
Concerning the effectiveness of personal selling on building customer loyalty, the results
in table 4.22 were collected.
60
Table 4.22: Effectiveness of personal selling in enhancing customer loyalty
Valid
I don‟t know
Averagely effective
Very effective
Extremely effective
Total
Frequency
Valid Percent
7
11
27
5
50
14.0
22.0
54.0
10.0
100.0
Majority, 54%, of employees agreed that personal selling was very effective in building
customer loyalty. It should be noted that personal selling enhances the contact between a
customer and the bank through a sales executive. The customers concerns about the bank
are addressed or communicated to the bank for effective response. When this is done
well, it makes the customer satisfied hence enhanced customer loyalty. This agrees with
Kotler‟s (2006) statement that personal selling allows relationship to grow between sales
people and customers which can then be transformed into customer loyalty, as the
customers‟ needs are consistently met.
4.5.6.2 Personal selling is effective in increasing bank sales
Figure 4.20 shows responses on the effect of personal selling on the sales of Post bank.
Figure 4.20: Personal selling increases sales
61
As shown in the figure, 44% of the respondents said that personal selling increases sales
very effectively and 28% said it increases sales extremely effectively. This is because
personal selling focuses directly on reaching customers, which acts to meet the very basic
needs they have, hence, making them make more sales. Previous studies like Yeshin's
(2012) agreed with the results that personal selling enhance a company‟s sales.
4.5.6.3 Effectiveness when selling Post Bank products
The first objective tested the effectiveness of personal selling on Post Bank‟s products.
Table 4.23 shows the findings that were collected.
Table 4.23: Effectiveness of personal selling on Post Bank’s products
Valid
I dont know
Averagely effective
Very effective
Extremely effective
Total
Frequency
Valid Percent
7
11
26
6
50
14.0
22.0
52.0
12.0
100.0
Majority, 52%, of employees said that personal selling was very effective when selling
Post Bank‟s products while 12% said it was extremely effective. This may be caused by
the fact that personal selling involves the bank‟s employee directly contacting potential
customers to market the banks products to them. Since human beings are social
organisms, they prefer dealing with people directly hence the positive effect of personal
selling.
4.5.6.4 Personal selling is effective in improving bank performance
The study also enquired the effectiveness of personal selling in enhancing the
performance of Post Bank. Figure 4.21 presents the findings.
62
Figure 4.21: Effect of personal selling on bank’s performance
As indicated in the figure, 32% of the respondents said that personal selling was very
effective in improving the bank‟s performance. Twenty percent said it was averagely
effective while another 20% said it was extremely effective. This may be attributed to the
fact that personal selling involves the bank‟s executive directly contacting a customer,
thus, most the customers questions and concerns are addressed leading to increased
loyalty or attraction of new customers, which enhances performance. This finding
concurs Yeshin's (2012) position that companies that effectively engage in personal
selling enhance their performance by way of increasing sales of the company‟s products.
63
4.5.6.5 Personal selling persuades customers to purchase from the bank
Figure 4.22 shows the results of whether personal selling persuades customers to
purchase from the bank.
Figure 4.22: Personal selling persuades customers to buy from Post Bank
Majority, 52% agreed that personal selling was very effective in persuading customers to
purchase from Post Bank. This could be attributed to the fact that personal selling
enhances contact between customers and the bank‟s products and offers a direct human
being who can answer or clarify customers‟ concerns. This finding is similar to Futrell
(2008) who established that personal selling enhanced direct customer-bank executive
communication that enhances purchasing rates.
4.5.6.6 Improving performance of personal selling
The study also sought to establish ways that would enhance the performance of personal
selling in Post bank. The results in table 4.24 were gathered.
64
Table 4.24: Ways of improving personal selling
Way of improving personal selling
Provide incentives to employees as encouragement e.g.
rewarding high performers
Employing trained/training sales executives on the different
modalities of effective personal selling
Offering cross-selling options over the counter
Use personal selling more often
Have commission based sales executives in order to increase
performance and aggressive marketing
Total
Frequency Percent
7
47
5
33
1
1
1
7
7
7
15
100
Majority of 47% of the employees said that the company must provide incentives and
rewards to well performing sales executives to enhance their morale and effectiveness.
This is because well motivated employees feel encouraged and concentrate more on their
work hence enhancing good results than less motivated employees who spend most of
their times looking for better options. Additionally, 33% said that the company should
train or employ trained sales executives who are aware of how to execute effective
personal selling. Well-trained employees are more informed of the tricks of enhancing
the performance of personal selling hence their preference.
4.6
Objective Tests and Analysis
The correlation results of the different marketing communication tools and performance
was also investigated and the results presented according to the objectives of study as
indicated in the subsequent results.
4.6.1
Advertising
On advertising, the correlation results between advertising and customer loyalty,
attraction of new customers, branch expansion, awareness creation and management role
are as shown in table 4.25.
65
Table 4.25: Correlation results on advertising and performance
Advertising
Advertising improves customer loyalty
Pearson Correlation
.739**
Advertising attracts new customers
Sig. (2-tailed)
N
Pearson Correlation
.000
50
.624**
Advertising increases sales volumes
Sig. (2-tailed)
N
Pearson Correlation
.000
50
.302*
Agressive marketing allows branch expansion
Sig. (2-tailed)
N
Pearson Correlation
.033
50
.314*
Advertising creates awareness
Sig. (2-tailed)
N
Pearson Correlation
.027
50
.214
Sig. (2-tailed)
N
Advertising reminds customers to purchase Pearson Correlation
PB's products
Sig. (2-tailed)
N
Management's advertising of PB products is Pearson Correlation
adequate
Sig. (2-tailed)
N
.136
50
-.508**
.000
50
-.290
.053
45
** indicates that correlation is significant at the 0.01 level (2-tailed) while * indicate that
correlation is significant at the 0.05 level (2-tailed).
The results in table 4.25 show that advertising practiced by Post Bank and customer
loyalty have a significant relationship at 0.001 significant level. The Pearson coefficient
(0.739) indicates that a unit increase in advertising is responsible for an increase in 0.739
units of customer loyalty. Given that advertising enhances brand publicity, it reminds
most of the bank‟s available customers of the continued existence of the bank and its
products, hence, motivating the need to purchase. This leads to the loyalty. Similarly,
there is significant relationship between advertising and the attraction of new customers
(p=0.000). A unit increase in advertising is responsible for attracting 0.624 units of new
customers. Just as it has been explained in customer loyalty, advertising enhances brand
66
publicity to new customers as well thus giving them a reason to join the bank. These
results concur with the findings by Borden (1964) who observed that advertising
familiarized a firms brand to its present and new customers, thus enhancing customer
loyalty as well as customer attraction.
The relationship between advertising and increase in sales volume is also statistically
significant (p=0.033). A unit increase in advertising leads to a 0.302 units increase in
sales volumes the bank records. This could be associated with the fact that when
advertising increases the customer base as well as their loyalty, it creates more points of
business for the company hence the increased sales volume. This finding is similar to
Perreault's (2000) that advertising promotes the seller‟s products by publicizing them for
enhanced purchases. A unit increase in advertising is also responsible for 0.314 increase
in branch expansion at 0.05 significance level due to the fact that p=0.027. This can be
linked to the fact that advertising enhances customer loyalty and attraction of new
customers who prompt expansion due to increased business/customer base.
There is no significance between Post Banks advertising and its ability to create
awareness of the bank (p=0.136). Since the findings have already indicated that
advertising publicizes the bank hence leading to customer attraction/loyalty, it will be
abnormal to argue that the bank‟s advertisements do not create awareness as there is no
significance. However, the right analysis is that the bank could not be measuring
awareness created by advertising probably due to availability of other indicators upon
which awareness is measured. This finding does not agree with those by Aliata et al.
(2012) who found significance between advertising and awareness.
As to whether advertising reminds customers, there is significance of 0.000. However,
the relationship is negative meaning that an increase in a unit of advertising leads to a
reduction in
reminding customers. This relationship could mean that Post Bank‟s
customers do not forget to buy the bank‟s products when they are not advertised but
rather for other reasons. As such, the customer‟s purchasing behavior of the bank‟s
products is not influenced by advertisement. This disagrees with Kottler‟s (2011)
discussion that advertising acts to remind customers of a brand‟s products/services.
67
The role management take in advertising Post Bank is not adequate based on there not
being significance (p=0.53) between advertising and Management‟s role being adequate.
The negative relationship indicates that managers do not implement the right advertising
hence leading to the negative relationship.
4.6.2
Direct Marketing
The correlation results between direct marketing and factors of performance are as shown
in table 4.26.
Table 4.26: Correlation of Direct Marketing and Performance
Direct
Marketing
Direct marketing
loyalty
improves
customer
Direct marketing attracts new customers
Direct marketing increases sales volumes
Direct marketing allows the banks
branch's expansion
Direct marketing enhances awareness of
the banks products
Direct marketing reminds customers to
purchase products
Management of direct marketing of the
bank's products is done frequently
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
.455**
.001
50
.086
.551
50
.444**
.001
50
.046
.752
50
.012
.934
50
-.458**
.001
47
.208
.204
39
There is significance between direct marketing and customer loyalty (p=0.001). A unit
increase in direct marketing results into a 0.455 loyalty among customers. Just like any
other marketing tool, direct marketing publicizes the company‟s products hence
68
enhancing loyalty of existing customers. This finding concurs with that by Van der
Merwe (2003) who also considered direct marketing a key ingredient to enhancing
loyalty. The correlation between direct marketing and attraction of new customers is not
significant (p=0.551). This means that direct marketing does not act to attract new
customers in Postbank. This could be attributed to the fact that direct marketing is done
one-on-one to customers to make them aware of and purchase available products.
Additionally, the fact that direct marketing is significant to reminding customers to
purchase the bank‟s products (p=0.001) confirms that the strategy is best fit to apply to
available customers than new ones.
The significance between direct marketing and sales volume is 0.001 indicating that Post
bank significantly used direct marketing as a strategy to increasing sales volumes.
Specifically, a unit investment in direct marketing resulted to 0.444 increase in sales
volumes. The enhanced loyalty that this strategy creates could be providing enhanced
business that makes the bank increase its sales volumes. This is similar to the findings
that direct marketing is efficient in producing sales (Peter & Donnelly, 1998).
As to whether direct marketing enhances bank expansion and creates awareness, there is
no significance. This could be attributed to the fact that direct marketing only reaches to
the available customers and not new ones, thus, it does not increase the customer base
who will prompt an expansion, nor does it create awareness to new customers. This
disagrees with Kotler and Armstrong (2004) observation that direct marketing enhances
awareness. There is no significance between direct marketing and frequency of
management‟s involvement in implementing the strategy (p=0.204). This indicates that
management has not taken adequate
measures to see the success of direct marketing.
This could explain why direct marketing does not relate to branch expansion, awareness,
and attraction of new customers.
4.6.3
Sales Promotion
The correlation results between sales promotion and factors of performance are indicated
in table 4.27.
69
Table 4.27: Correlation Results between Sales Promotion and Performance
Sales promotion improves sales
Sales promotion improves performance
Sales promotion creates awareness
Management of PB uses sales promotion frequently
Sales promotion improves customer loyalty
Sales promotion leads to branch expansion
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sales
promotion
.988
.000**
47
.136
.347
50
.094
.516
50
.125
.386
50
.064
.667
48
.206
Sig. (2-tailed)
.161
N
48
Sales promotion directly and significantly affects sales (coefficient =0.988; p=0.000).
This may be attributed to the fact that sales promotion aims to publicize and market a
company‟s products to its customers. Additionally, sales promotion offers things like
discounts which lure customers to purchase hence increasing sales volumes. This result
concurs with the finding by Kotler‟s (2011) that sales promotion tells customers „buy
now‟; and Peter and Donnelly's (1998) that sales promotion involves the push factors that
accelerate sales and the pull factors that encourage customers to ask for certain products
they seek to buy. The fact that there is no significance between sales promotion and the
other variables of performance means that sales promotion in Post Bank was majorly
used to enhance sales volume.
There is no significance between sales promotion and customer loyalty (p=0.667); branch
expansion (p=0.161); management‟s role (p=0.386); awareness creation (p=516); and
improved performance (p=347). This means that Post bank does not implement sales
promotion for purposes of increasing or enhancing these factors.
70
4.6.4
Public Relation
Table 4.28 shows the correlation of different components of performance of Post Bank to
public relations.
Table 4.28: Correlation between Public Relations and Performance
PR has improved PB image
Pearson Correlation
Sig. (2-tailed)
N
PR has increased sales volume
Pearson Correlation
Sig. (2-tailed)
N
PR has built customer loyalty
Pearson Correlation
Sig. (2-tailed)
N
PR has attracted new customers
Pearson Correlation
Sig. (2-tailed)
N
PR has led to branch expansion
Pearson Correlation
Sig. (2-tailed)
N
PR reminds customers to purchase PB's Pearson Correlation
products
Sig. (2-tailed)
N
Is management of PB keen on PR
Pearson Correlation
Sig. (2-tailed)
N
Public
relations
.141
.330
50
.023
.876
50
-.218
.128
50
-.027
.850
50
-.092
.527
50
.335*
.018
50
-.521**
.000
50
Public relations implemented by post bank only correlated significantly with reminding
customers to purchase the banks products and management‟s keenness (p=0.018 and
p=0.000 respectively). A unit increase in public relations led to 0.335 units of customers
being reminded on the need to purchase the bank‟s products. This could be attributed to
the fact that PR enhances the relationship customers have with the bank, hence,
influencing customers‟ need to purchase the bank‟s products. This result concurs that by
Cutlip et al. (2000) that the aim of PR is to establish mutual relations between people and
the organization. The coefficient between public relations and management‟s keenness is
negative indicating that management‟s keenness to PR was poor or negative. As such, the
71
management of Post Bank was not implementing PR in the direction that it would result
into positive impact to the organization.
The table also shows that public relations did not have statistical significance with
enhanced image of the bank; increased sales volume; enhanced customer loyalty;
enhanced attraction of new customers and branch expansion. This is attributed to the
significant levels that are greater than 0.05.
4.6.5
Personal Selling
The correlation between personal selling and the different components through which
performance of Post Bank is measured revealed the results indicated in the table 4.29.
Table 4.29: Correlation between Personal Selling and Performance
Personal selling persuading customers to Pearson Correlation
purchase the bank‟s products
Sig. (2-tailed)
N
Personal selling building of customer Pearson Correlation
loyalty to the bank
Sig. (2-tailed)
N
Personal selling increasing bank sales
Pearson Correlation
Personal
selling
performance
improving
Sig. (2-tailed)
N
bank Pearson Correlation
Sig. (2-tailed)
N
Personal
selling
.318*
.024
50
.418**
.003
50
.375**
.007
50
.603**
.000
50
Personal selling and Post bank‟s ability to persuade customers to purchase the bank‟s
products have a significant relationship that is positive (coefficient 0.318; p=0.024). This
means that the bank achieves 0.318 increase in persuading customers to buy its products
when it implements a unit increase in personal selling. Since personal selling involves a
sales executive directly reaching to people to market the banks products, the executive
can be very insisting on wanting a customer to purchase hence the results. This is similar
72
to the finding by Futrell (2008) that personal selling enhanced direct customer-bank
executive communication that enhances purchasing rates.
The ability of personal selling to enhance customer loyalty is also positive and significant
(coefficient 0.418; p=0.003). This means that a unit increase in personal selling in Post
Bank accounts for a 0.418 units customer loyalty. This result is attributed to the fact that
personal selling involves the bank‟s marketing executive interacting with the customer
directly. In that exchange, most of the customers questions, uncertainties and concerns
about the bank‟s products are addressed hence motivating the need of the customer to
patronize the bank-loyalty. This was also replicated earlier by Kotler‟s (2006) that
personal selling allows a relationship to grow between sales people and customers, which
is then changed into customer loyalty.
Personal selling increases bank sales by 0.375 for every unit; the relationship is
significant (0.007). This could be attributed to the enhanced customer loyalty and
persuasion to buy that the strategy creates. Loyal customers will always purchase from
post bank hence enhancing sales. Persuasion will also see every customer being
motivated to buy the products hence increased sales volume. These analyses replicate
whet Yeshin (2012) observed.
It was also found that personal selling improves bank performance in Post Bank as they
had a significant relationship (p=0.000). A unit increase in personal selling accounted for
0.603 units of enhanced bank performance. This can be attributed to the fact that personal
selling enhanced the bank‟s customer loyalty, product purchases, and sales volume. This
result also concurs with the findings by Yeshin (2012) that personal selling enhanced
performance of companies.
4.6.6
Performance of Integrated Marketing Communication Tools
The study regressed the performance of Post Banks products against the different IMC
methods at use in the bank. The regression output results are as indicated in the tables
4.30 and 4.31.
73
Table 4.30: Model Summary
Model
R
R Square
Adjusted
R
Square
1
.661a
.437
.374
a. Predictors: (Constant), Public relations, Advertising,
Sales promotion, Personnel selling
Std. Error of the
Estimate
1.011
Direct Marketing,
The model summary shows that there is a strong linear relationship between performance
of Post Banks products and advertising, PR, direct marketing, sales promotion and
personnel selling (R=0.661). The R2 value of 43.7% indicates the percentage of accuracy
to which performance of Post bank‟s products can be accurately explained by the
company‟s advertising, PR, direct marketing, sales promotion, and personal selling. This
means that 56% of the performance of Post Bank‟s products is explained by other factors
other than the IMC factors studied in this research.
Table 4.31: Coefficientsa
Model
1
Unstandardized Coefficients
t
Sig.
B
Std. Error
(Constant)
1.596
1.270
1.257
.215
Advertising
Sales promotion
Personal selling
Direct Marketing
Public relations
.504
-.274
1.070
-.133
-1.011
.184
.238
.242
.213
.241
2.732
-1.154
4.414
-.625
-4.192
.009
.255
.000
.535
.000
The coefficients table show that the performance of Post Bank‟s products has a positive
relationship that is statistically significant (P=0.009; T=2.732) to advertising. An increase
in the performance of the bank‟s products is attained with an increase in advertising of
0.504 units. As such, the bank‟s increased advertising of its products results in enhanced
performance of the products. This finding concurs with Perreault (2000) that advertising
seeks to promote the seller‟s products by means of publicizing them through different
kinds of media. The result also concurs with the findings Aliata et al. (2012) who found
74
advertising to have a positive statistical significance with performance measured in terms
of profits in NBK.
Personal selling also has a direct (positive) relationship with the performance of Post
Bank‟s products where a unit increase in the performance of the bank‟s products is
caused by a consequent increase of 1.07 units of personnel selling. This relationship is
statistically significant (P=0.000; T=4.414). This also means that Post Bank significantly
uses personnel selling as a way of enhancing the performance of their products. This
confirms the findings presented by Yeshin (2012) that companies that effectively engage
in personal selling enhance their performance by way of increasing sales of the
company‟s products. Aliata et al. (2012) also found statistically significant positive
relationship between personal selling and performance though they measured their
performance in terms of profits.
There is an inverse relationship between the performance of Post Bank‟s products and
sales promotion strategies of marketing. Thus, a unit increase in the performance of the
bank‟s products is caused by a drop of 0.274 units of sales promotion. This means that
the manner in which the bank engages sales promotion is wrong to an extent it reduces
the performance of the products. This could be attributed to poor training or under trained
sales promoters who do not turn the strategy into positive results. The fact that there is no
statistical significance between the performance of the bank‟s products and sales
promotion (P=0.255; T=-1.154) also confirms that the bank has not taken sales promotion
seriously as a strategy of enhancing the performance of its products. As such, things like
inadequately trained sales promoters could be one such reason. This result contradicts
what Aliata et al. (2012) found, as they noted a statistically significant relationship
between sales promotion and performance.
Direct marketing also has an inverse statistically insignificant relationship with the
performance of the bank‟s products (coefficient= -0.133, P=0.535;T=-0.625). This also
indicates that the bank has not invested in direct marketing as a key component to
enhance the performance of the bank‟s products. The way direct marketing is done is
wrong to an extent that it reduces the performance of the bank‟s product by 0.133. Given
75
the company is a service company, the negative insignificant relationship may be a result
of less qualified or less trained direct marketers who do not attract the right result from
direct marketing. This results contradict the arguments presented by Van der Merwe's
(2003) and Peter & Donnelly (1998) who associated enhanced performance with
increased direct marketing-a positive relationship.
The results also show that PR has an inverse statistically significant relationship with
performance. This result shows that the PR in Post Bank does not lead to performance as
established by Kerin (2009). This could be attributed to the fact that Post Bank does not
adequately invest in public relations as a crucial component to enhancing the
performance of its products. This could be the reason why instead of PR enhancing, it
reduces the performance of the bank‟s products. However, the fact that the relationship is
statistically significant (P=0.000; T=-4.192) means that the company uses PR in making
decisions concerning the performance of its products. This relation then enhance
customers ability to purchase more from the organization.
76
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
5.1
Introduction
This chapter presents the summary of findings the researcher collected, the conclusions
associated with those findings and the relevant recommendations the study makes.
5.2
Summary of Findings
5.2.1
Advertising
First, the study investigated whether advertising Post Bank‟s products improved customer
loyalty. The results showed that 86% agreed that advertising enhanced customer loyalty
of Post bank and 100% agreed that advertising attracts new customers to the bank.
Majority (84%) also agreed that advertising increases the sales volumes that Post Bank
makes at any given moment. Aggressive advertising that resulted into high customer
attraction, loyalty, and high sales also led to branch expansion as argued by majority
(70%) of the respondents. Eighty-four percent of respondents agreed that advertising
creates awareness on Post Bank and its products and 74% agreed that advertising reminds
customers to purchase Post Bank‟s products. However, majority (76%) said that
management of Post Bank does not offer adequate advertising to the bank‟s
products/services. The performance of advertising in Post Bank has a positive statistically
significant relationship with advertising.
5.2.2
Direct marketing
As to the effect of direct marketing on performance of Post Bank, the study found that
72% of employees agreed that direct marketing enhances customer loyalty for Post Bank
while majority of 82% said that it attracts new customers. Majority of 86% of the
employees also agree that direct marketing enhances sales volumes of Post bank, 66%
agreed that direct marketing allowed expansion of post bank branches, 86% agree that
direct marketing enhances awareness on the banks products, and (83%) of the employees
77
agreed that direct marketing reminded customers to purchase products that Post Bank
offered. According to 74% of employees, the management of Post bank manages direct
marketing frequently. Direct marketing was, however, found to have an inverse
statistically insignificant relationship with the performance of the bank‟s products.
5.2.3
Sales promotion
The third objective established the effect of sales promotion on the performance of Post
bank. The results showed that majority (56%) of employees perceived sales promotion as
fair and out of these, 83%, said that the reason why the perception was fair was because
there was inconsistency in implementing sales promotion while 50% said sales promotion
was poor because it was not done well. This made it difficult for sales promotion to be
good or better. However, according to 85% of employees, most customers had positive
response towards sales promotion. Majority, 100% of employees also agreed that sales
promotion improved the sales of Post Bank. Summarily, 92% of respondents agreed that
sales promotion improves performance of Post Bank. Majority, 96%, also agreed that
sales promotion created awareness of the bank among the public. Sixty eight percent of
respondents agree that sales promotion enhances customer loyalty of Post Bank, and 44%
agreed that sales promotion leads to the expansion of Post bank‟s branches. Statistically,
the study also found there to be an inverse statistically insignificant relationship between
the performance of Post Bank‟s products and sales promotion strategy of marketing.
5.2.4
Public relation
On public relations, the study established that majority of 40% of employees note that
public relations had increased post banks image to a large extent; 76% of the respondents
said that PR influenced sales volume of post bank to an average extent; and majority
44%, of respondents said PR built customer loyalty to an average extent. Majority (46%)
of respondents agreed that on an average extent PR in post bank attracts new customers;
22% said public relations attracts new customers to a large extent while 18% said it
attracts customers to a very large extent. This result also shows that the management of
Post Bank had not done much to ensure that PR attracts customers to a large extent. A
78
majority (42%) also agreed that good PR enhanced branch expansion to a large extent;
60% of employees said that to an average extent PR reminded customers to purchase the
bank‟s products; and 50% considered the public relations offered by Post bank as poor.
According to majority (44%), the reason why PR was poor in Post bank was because
management of the bank had not been keen on issues to do with PR. To correct this,
majority of the respondents proposed hiring, training, and deploying staff appropriately to
handle PR issues. Summarily, the results show that PR has an inverse statistically
significant relationship with performance of the bank‟s products.
5.2.5
Personal Selling
The last objective investigated how effective personal selling is to the performance of
Post Bank. Findings show that 52% of employees believe that personal selling was very
effective when selling Post Bank‟s products; 54% agreed that personal selling was very
effective in building customer loyalty, and 44% of the respondents said that personal
selling increases sales very effectively. Concerning how personal selling affected bank
performance, 32% said it was very effective in improving the bank‟s performance.
Majority of 47% of the employees said that the company must provide incentives and
rewards to well performing sales executives to enhance their morale and effectiveness.
Additionally, the study found that personal selling has a direct (positive) statistically
significant relationship with the performance of Post Bank‟s products
5.3
Conclusions
5.3.1
Advertising
In Post Bank, advertising has contributed to enhancing customer loyalty, attraction of
new customers, increasing sales volumes, enhancing branch expansion, creating
awareness on the bank and its products, and reminding customers to purchase the bank‟s
products. However, the extent to which the bank has implemented advertising is still low
and its full benefits have not been tapped. The performance of Post Bank is statistically
significant to advertising (P=0.009; T=2.732).
79
5.3.2
Direct marketing
The study also concludes that direct marketing has also contributed to the customer
loyalty, attraction of new customers, increasing of sales, expansion of bank‟s branches,
enhancing awareness on the banks products/services, and reminding customers of the
need to purchase the bank‟s products that the bank currently enjoys. The management
also manages direct marketing frequently based on the importance the strategy has on the
company‟s performance. However, though the significance of direct marketing on past
performance of Post bank is visible, the company‟s management does not include direct
marketing as a key decision maker while thinking of the marketing tool to adopt. The
study also concludes that direct marketing relates inversely and insignificantly to
performance of Post bank (P=0.535; T=-0.625).
5.3.3
Sales Promotion
The extent to which Post Bank does sales promotion is not adequate due to inconsistency.
Nevertheless, customers appreciate sales promotion strategy significantly. So far, sales
promotion has enhanced the sales volumes of Post Bank, created awareness of the banks
products, enhanced customer loyalty, expansion of the bank, and attracted new
customers. Though this progress has been made, management is not keen on using sales
promotion to enhance the bank‟s performance, as there is no statistical significance. It is
also concluded that there is an inverse relationship between the performance of Post
Bank‟s products and sales promotion (P=0.255; T=-1.154).
5.3.4
Public Relation
Public relations significantly builds bank‟s image, enhances sales volumes, averagely
builds customer loyalty, attracts new customers, enhances branch expansion to a large
extent, and on average reminds customers to purchase the bank‟s products. However, the
extent of implementation of PR in Post Bank is poor because management is not keen on
issues to do with PR. Management may not be investing in PR as required prompting an
inverse relationship with performance. Additionally, public relations at Post bank has a
80
statistically significant negative effect to the performance of the bank (P=0.000; T=4.192).
5.3.5
Personal Selling
On personal selling, the study concludes that according to employees, personal selling is
an effective way of selling a bank‟s products. Personal selling enhances customer loyalty,
increases sales, and enhances performance. However, the bank does not invest
strategically in personal selling. Personal selling has a direct statistically significant
relationship with the performance of Post Bank‟s products (P=0.000; T=4.414).
5.4
Recommendations
The management of Post bank should significantly invest in all the five IMC tools as they
offer tangible benefits on the performance of the company. The bank should invest
further in employing well-trained staff to participate or take charge of the marketing
communication tools. Additionally, the bank should engage in on-the-job training
programs to equip available employees on the changing needs of the market so that the
employees can engage marketing strategies that match to those needs.
The bank‟s management should play the leadership role in ensuring the IMC tools work
to the benefit of the company by being keen on the relationship between the tools and the
performance of the bank. Additionally, the management should show goodwill towards
enhancing the performance of the bank by significantly investing in the success of the
IMC tools.
The study has also established CSR as an important aspect that the bank needs to invest
in. It is, therefore, recommended that the management will take a keen interest of
investing in CSR
5.5
Recommendations for Further Study
One of the recurring recommendations that employees gave for making the performance
of the IMC tools better is by engaging customers and employees in decision making.
81
Since this was beyond the scope of this study, it was not covered elaborately. As such,
the study recommends an investigation into the extent to which employees and customers
of Post Bank are involved in decision making, particularly concerning the different
marketing strategies used.
Even though CSR has a lot of benefits to firms, Post bank rarely appreciates this activity.
This is retrieved from the recommendations employees gave on enhancing PR of the
company. This study, thus, recommends an investigation into why the company was not
investing in CSR as a major PR tool.
82
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85
APPENDICES
Appendix I: Cronbach’s Table
Table 4.2-Cronbach’s alpha if questions deleted
Question
Cronbach's Alpha
if Item Deleted
Marketing communication tool that will increase performance
.864
Advertising
.810
Sales promotion
.798
Personnel selling
.791
Direct Marketing
.805
Public relations
.795
Advertising improves customer loyalty
.798
Advertising attracts new customers
.799
Advertising increases sales volumes
.787
Agressive marketing allows branch expansion
.806
Advertising creates awareness
.800
Advertising reminds customers to purchase PB's products
.789
Management's advertising of PB products is adequate
.768
Personal selling of PB products is effective
.776
PS persuading customers to purchase PB's products
.785
PS's building of customer loyalty to PB
.795
PS's increasing bank sales
.786
PS's improving bank performance
.781
DM improves customer loyalty
.797
DM attracts new customers
.786
DM increases sales volumes
.791
DM allows the banks branch's expansion
.788
86
DM enhances awareness of the banks products
.802
DM reminds customers to purchase products
.794
Management of DM of the bank's products is done frequently
.795
PR has improved PB image
.796
PR has increased sales volume
.815
PR has built customer loyalty
.812
PR has attracted new customers
.806
PR has led to branch expansion
.806
PR reminds customers to purchase PB's products
.815
Effectiveness of PR in achieving PB's performance
.801
Employee perception of PR in PB
.800
Level of importance of PR in improving customer loyalty
.801
Is management of PB keen on PR
.805
How employees percieve sales promotion of PB
.785
Customer response during sales promotion
.801
Sales promotion improves performance
.803
Sales promotion creates awareness
.801
Management of PB uses sales promotion frequently
.797
Sales promotion improves customer loyalty
.798
Sales promotion leads to branch expansion
.793
How PB's products compare to competitors'
.790
87
APPENDICES 1. INTRODUCTION LETTER
QUESTIONNARE: INTERGRATED MARKETING COMMUNICATION AND
PERFORMANCE IN POST OFFICE SAVINGS BANK.
Dear respondent
I am a Kenyatta university post-graduate student doing a research in partial fulfillment
for the degree of master of Administration(marketing option).I wish you to assist me in
doing my research by providing me with some relevant information. Please not that any
information given in this questionnaire will be treated confidentially and will be used for
academic purpose only.
Thank you in advance.
Rose Jemutai Cheruiyot
88
APPENDIX 2: QUESTIONNAIRES
Part A: Biodata
1. Kindly indicate your gender?

Male
Female
2. Kindly indicate the department you are in?
Customer Service
Marketing
Operation
Finance and Accounting
Others
3. Kindly indicate how long have you served in this department?
0-5 Years
6-10 Years
11-15 Years
Over 15 years
4. Which Salary Income Levels to you belong.


0-20,000
20,001-40,000
40,001- 60,000

60001-80,000
800001-120000
Over 120000
5. Kindly indicate by ticking the Position held in the organization. 
89
Manager
Supervisor
Customer Relation officer
Clerilcal Officer
Others-Please Specify
Part B (To be answered by the all employees)
6. Which of the following marketing communication tools do you think will
improve performance in the bank.
 Proper use of advertising
 Sales Promotion
Public Relations
Direct Marketing

Personnel selling
Other (Please explain
________________________________________________________________________
________________________________________________________
7. The following are some of the Integrated marketing communication tools. Kindly
rate/Rank the tools according to order of importance. Where
5 – Excellence, 4-
very good, 3-good, 2-fair, 1-poor
 Factors
5
4
3
Advertising
Sales Promotion
Personnel selling
90
2
1
Direct marketing
Public Relations
Part C. Advertising
8. Do what extent to you agree or disagree with the following statements.
Where; Strongly agree=5,Agree=4,Not sure =3,Disagree 2,strongly disagree=1
Statements
5
4
3
2
1
3
2
1
Advertising of Postbank products improve customer loyalty
Advertising of Postbank product encourage new customers
Advertising of products increase sales volume
Aggressive marketing of Postbank product allow the branch expansion
Advertising of Postbank products creates awareness
Advertising of Postbank products remind customers to purchase the products
Management advertisement of Postbank products are enough
Part D: Direct marketing
9. What is your level of agreement or disagreement on the following
direct
marketing on Postbank Products? Use the scale below in providing your answers.
Strongly agree=5, Agree=5,Not sure =3,Disagree 2,strongly disagree=1
Statements
5
Direct marketing of Postbank products improve customer loyalty
Direct marketing of Postbank product encourage new customers
Direct marketing of products increase sales volume
Direct marketing allow the branch expansion
Direct marketing of Postbank products creates awareness
Direct marketing of products remind customers to purchase the products
Direct marketing help the bank to remind customers to purchase the products
91
4
Management that the direct marketing of Postbank products are done more
frequently
Part E: Sales promotion
10. How do you perceived on Sales promotion in the bank.
Excellent
Very good

Good

Fair

Poor
11. Give reasons for your perception on sales promotions
________________________________________________________________________
________________________________________________________________________
_________________________
12. How is customer‟s response during Sales Promotion?
Positively
Negatively
None
13. The following questions relate to your opinion of sales promotion, chose by
ticking on your opinion
Yes=3
92
No=2
Don‟t know = 1
Statements
3
2
1
Sales promotion improve customer loyalty
Sales promotion improve sales
Sales promotion leads to branch expansion
Sales promotion create awareness
Participated in sales promotion improves performance
Management uses sales promotion more frequently
14. Suggest other ways in which sales promotion can improve performance in the
bank?
________________________________________________________________________
_____________________________________________________________________
Part F: Public relations
15. To what extend to you agree with the following statements in the use of scale 1 to
5 .where 1= very large extent
2= Great extent 3= average extent extent 4 =
No extent
Statements
5
Public relations builds customers loyalty
Public relations attract new customer
Public relations increase sales volume
Public relations can lead to branch expansion
Public relations remind customers to purchase the product
Public relations improves Postbank image
93
4
3
2
1
16. In your own opinion how effective is Public relations towards achieving Postbank
performance
 Very effective
 Effective
 Ineffective
 Inadequate
If not give reasons
________________________________________________________________________
________________________________________________________________________
____________
17. In your own opinion how does employees perceived Public Relation carried out
in the Bank
5
4
3
2
5= Extremely well
4= Very Well
3= Well
2= Poor
1= Extremely Poor.
If poor give your reasons
94
1
________________________________________________________________________
__________________________________________________________________
18. In your own suggestions do you agree that Public Relations is important in
improving customer loyalty
Rating Scale
4=Very important 3= important 2=neutral 1= unimportant
4
3
2
1
19. Suggest other ways in which Public relations
should be done to improve
performance
__________________________________________________________________
__________________________________________________________________
_
20. Is the management of the bank very keen on public relations
Yes
No
Please
explain__________________________________________________________________
_______________________________________________________________________
Part G: Personal selling
21. In your own opinion what is your level of effectiveness on personal selling to
Postbank Products? Use the scale below in providing your answers.
95
Rating scale

5= extremely effective

4= Very effective

3= Effective
2= neutral

1= Ineffective
 Statements
5 4 3 2 1
Personal selling is effective in building customer loyalty
Personal selling is effective in increasing bank sales
Personal selling is effective when selling Post Bank products
Personal selling is effective in improving bank performance
Personal selling is effective in persuading customers to purchase
Postbank products
22. Suggest ways in which the bank should improve performance by usage of
personal
selling____________________________________________________________
__________________________________________________________________
___________
23. How do you think the management should do in order to improve integrated
marketing communications the bank?
________________________________________________________________________
24. How would you rate Postbank products as compared to the competitors in
banking sector
 Excellent
96

Very good

Good

Fair

Poor
25. In your own opinion, what other areas of integrated marketing communications
needs
improvements
so
as
productivity____________________________________
97
to
improve
APPENDIX 3:TIME FRAME
MONTH
DURATION(WEEKS)
November 2013
2-3
ACTIVITIES
Search for a topic
End of November 2013 3-4
Reading on the topic
Dec 2013
1-4
Proposal writing
End of Dec 2013
1-4
Consultation with supervisor
Jan 2014
1-2
Literature Review
End of Jan 2014
3
Handing in the proposal
Feb 2014
2
Data collection
End of feb 2014
2
Data analysis and presentation
May 2014
1
Handing in the project
98
APPENDIX 4: BUDGET
ITEM
AMOUNT (Kenya Shillings)
Travelling expenses
30,000
Typing and printing
15,000
Stationary
10,500
Photocopies
10,000
Computer Time
15,000
Binding
5,000
Total
90,000
99