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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. v 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 vi 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 vii 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 viii 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 ix 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 xi 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. 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Integrated marketing communications. 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