The Role of Bank Marketing and Banking Products of Commercial Banks in Cameroon

Abstract

In recent years, the banking industry in Cameroon has experienced significant growth and expansion, with the emergence of several commercial banks. As the competition among banks becomes more intense, the role of marketing in promoting banking products and services has become increasingly important. This study examines the role of bank marketing and banking products of commercial banks in Cameroon, focusing on the strategies banks use to attract and retain customers. Using a mixed-methods approach, the study analyzes the marketing strategies employed by commercial banks in Cameroon and the impact of these strategies on customer satisfaction and loyalty. The study finds that commercial banks in Cameroon are using a range of marketing strategies, including advertising, branding, and customer relationship management, to promote their products and services. The study also finds that these marketing strategies have a significant impact on customer satisfaction and loyalty, with customers expressing a preference for banks that offer personalized services, competitive interest rates, and convenient banking channels. The study concludes that bank marketing and banking products play a critical role in the growth and success of commercial banks in Cameroon, and calls for continued investment in marketing strategies to enhance customer satisfaction and loyalty

Key words: Bank Marketing, Banking products, Face to face Marketing, Commercial Banks, and Cameroon

CHAPTER ONE

INTRODUCTION

1.1 Introduction of study

In this project, we are going to discuss the effect of bank marketing on commercial banks. We are to analyses the role of bank marketing on banking products of commercial banks in Cameroon which we will base on both online and digital marketing.

1.2 Background to Study

 Commercial banks, being some of the most vital financial intermediaries of every financial system, play a key role in the growth of every economy. The first prototype of banks can be traced right back to 2000 BC in Assyria.and Sumeria in ancient Greece where the merchants who had lots of wealth granted loans to farmers and traders. Sometime later, during the Roman Umpire, lenders in temples made loans accepted deposits and also carried out money exchange. Archaeology in ancient China and India also shows evidence of some of these money lending activity. (Butterworth-Heinemann, Oxford, UK 1991).

In the I4′^h century came the Renaissance Italy that dominated banking in the world with banks established in Italy like the Medici bank established in 1397, and the Banca Monte dei Paschi di Siena which is the oldest bank in the world in existence operational since 1472. These banks had branches spread in many parts of Europe. The development of banking soon creeped to the Roman Umpire and by the I6^lh century, banking institutions had spread all over Europe accompanied with massive innovations which took place I Amsterdam in the 17^lh century and in London since the 18^,h century. (U.B.I. Brussels, 2004)

Bucureti, (2001)The banking practices since 2000 BC have greatly contributed to the economic growth of the areas where they were practiced and the returns from their operations constituted a large portion of the GDP of their geographical locations. This is clearly evident in the blossom of the Holy Roman Umpire which strived from around 2000 BC to 1806, the Renaissance Italy of the 14^th century. (Dictionary Explicative, Editura Economic, Bucure ti, 2004.) During the 70s, many banks did not use the marketing in their activity, their management being market- oriented.  Once  the  competition  intensified,  some  of  the  banks  have  started  to  use  the  marketing, launching some extremely expensive advertising campaigns. The banks were counting on the fact that they could fool the customers by various promotional activities, by which they could hide the negative aspects related to their own banking services. The first failures of the advertising campaigns proved to the banks that on the one hand these campaigns could ruin them, and on the other hand that the main problem  did  not  consist  in  attracting  new  customers,  but  in  keeping  them. (Karl E, et al, (1994)). During this period, the advertisement was the most important marketing activity performed by the banks;

African Development Bank, (2007) During  the  80s,  the  banks  developed  programs  to  support  the  business,  they  promoted  the  bank marketing on a large scale, engaging all its constituent aspects: establishing and organizing the offer of products/services to satisfy the existing needs; promoting and orientating the products/services towards responding  to  the  considered  requirements  of  the  business.  It  is  a  time  when  the  banks  no  longer accentuate the trade, the short term sale of banking products, their volume increase; instead they focus on the perennial value of the customer, pursuing the winning of new customers.

During  the  90s,  the  banks  focused  their  efforts  in  order  to  create  some  superior  banking

Products/services, on the one hand following the assurance of the customer needs’ satisfaction, and on the other hand establishing lasting relationships with them. During this period, the financial sector and implicitly the banking sector experiences a significant growth in the developed countries.

African Development Bank, (2007) During  the  21st  century,  the  banks  act  in  a  dynamic  environment,  where  the  market  and  the  other factors  (components  of  the  political,  economic,  social,  juridical,  cultural,  demographical  and technological  environment)  frequently  raise  problems,  forcing  them  to  additional  efforts  or  offering them  opportunities  that  need  to  be  fructified  as  well  as  possible;  they  need  to  integrate  their  current actions to their long term objectives which were previously determined by the bank marketing policy.  Adapting  the  banking  institution’s  activity  to  the  environment  requires  a  continuous  tracking  of  the structural quantity and quality changes which the environment registers or will register.

Cameroon is triangular in shape and is bounded to the west by Nigeria,  to  the  East  by  Central  African  Republic,  to  the  North  by Chad  Republic  and  to  the South by the Republic of equatorial Guinea and the Atlantic Ocean.

Cameroon has a land surface area of 47400km with a population of approximately 20 million People.  Cameroon has 10 regions with the capital Yaoundé.  Each region is headed by a Governor. Cameroon has 240 ethnic groups and 24 languages (linguistic groups_.  Prominent Tribes include the Fulbes in the North, the grass landers of the West, the Pygmies to the East and the Bettis to the South.

However, from the economic standpoint, Cameroon uses the FCFA as it sole currency. It is dependent on its primary agricultural products for exports. Some of these products include Crude oil, petroleum, coffee, cocoa, rubber, banana and timber. Her primary imports include Machinery, and transportation equipment’s, iron and steel. Between 1961 and 1981, there was positive  balance  of payment  (BOP)  for  8  years and  negative  BOP for  12  year. Also from an economic point of view, on the 12^th of January 1994 Cameroon devalued her currency and this Made Cameroon’s economic indicators to have positive values.  This was due to an increase Export and a decrease in import brought by changes in the parity of the FCFA to the French France. Cameroon’s economic growth for the first 20 years of independence turned around 7% with the  liquidation  and  restructuring  of  most  banks,  coupled  with  the  liquidation  and restructuring  of  most  banks  coupled  with  the  changes  in  the  motutary  and  fiscal  policies,

Internal and external constituents related to prudential rules, sound banking management, Cameroon’s sources of fiancé for the economy became slem and squeezed. Today Cameroons Economic growth stands at 2.8%.

Formal  banking  in  Cameroon  is very  recent,  in  fact less  than  50  years  old  and its  origin  is

Traced back to the late era of colonization.  The first bank in Cameroon was established way before independence. However, before the advent of modern banks small societies had some sort of banking carried out through in a primitive manner.  Thrift and loan societies being regulated by the customs and tradition.  Treasurers of such societies played all the important functions of bank and bankers.

African Development Bank, (2007) However the Cameroonian banking industry has evolved from the local practices to modern Banking. Cameroon is a member of BEAC (Bank of Central African States) and also a member of  CEMAC  (Central  African  Economic  and  Monetary  Community)  the  banking  industry  is

governed  by  laws,  enactments,  ministerial  orders  and  presidential  decrees.  The banking System is regulated by bodies which include CONAC, NCC, APECAM, BEAC and MINEFI. The advent of  modern  banking has  seen the collapse,  liquidation  and Recapitalization  of  certain banks such  as  the  liquidation of bank  meridian  BIAO Cameroon  (BMBC)  in 1996  and  credit Agricole du Cameroon (CAC) in 1997. The incorporation of commercial bank of Cameroon and the Acquisition of Amity Bank by Atlantic Bank and the Progression National Financial Credit Company) NFCC) to National Financial Credit Bank (NFC Bank) in 2006).  However with the prevailing prudential and stricter regulations. (J.L Hanson, (1980) Dictionary of Commerce and Finance) There are basically 12 commercial banks operating in Cameroon today and they include Societé general des Banque au Cameroon (SGBC)

SCB-Credit Lyonais du Cameroon (SCB-CL)

Standard chartered bank of Cameroon (SCBC)

Atlantic Bank

Citibank

Ecobank

Union Bank of Cameroon (UBC) 

Afriland first Bank PLC

National Financial Credit Bank (NFC Bank)

Union Bank of Africa

Banque International du Cameroon pour l’epagne et le credit (BICEC)

Commercial bank of Cameroon

Apart  from Atlantic  bank  PLC,  Afriland  First bank,  Union  bank  of  Cameroon,  Ecobank,  Citi bank,  Standard Chartered  Bank, NFC  bank  and  Union bank  of  Africa  the  other  banks  have government share-holdings of between 35% to 83% and are heavily influenced by the later. Commercial banks in Cameroon carry out the traditional bank functions. Lending short term and specializing in short term self-liquidating trade finance. Long term loan are being given by the central bank. The restructuring process of the banking sector was completed in January 2000 when the last state-owned bank was sold out. (African Development Bank, (2007))

1.3 Statement of Research Problem

According  to  Zhufany,  (2004)  commercial  banks  refers  to  a  profit  making  privately

Owned financial institution which receives deposits from the general public, safeguards them and makes loans to the public. Some other functions of commercial banks include; providing Investment advices to the public, gives advice to the customers on financial markets, provides Foreign exchange services and the issuing of travel’s cheque to customers. They also act as Guarantors i.e. standing behind their customers to pay off their debt, when they are unable to pay,  they  carry  many  other  roles  such  as  agency  role,  payment  role,  policy  role  and  risk management  role.  This  services  pronded  by  commercial  banks  goes  a  long  way  to  raise income levels and standards of living of citizens. In  1980s,  Cameroon  faced  a  serious  economic  crisis  which  was  very  detrimental  or  every sector  of  the  economy  of  which  commercial  banks  were  involved.  Various conditions Combined together to lead to this crisis. The government admitted that the crisis was caused by the sudden drop in the prices of exports of goods and services in the international market. The  most  prominent  outcome  was  the  hike  in  the  prices  rates  of  daily  commodities.  In response  to  this  severe  economic  crisis,  the  Cameroonian  government  initiated  a  reform program that focused on  re-organizing  the  public  finance  system, liberalizing foreign trade. This led to economic recovery in the late 1990s still to address the economic crisis. The SAP was introduced in Cameroon which meant that some server economic policy changes with the leading one being the dainties to be a facilitator of this dainties like in most countries, popular opinion holds that  the  SAP  has failed because  of  the  level  of poverty  increased  dramatically during the late 1980s and 1990s.  The  admission  of  HIPC  debt  reduction  imitative  in  April  2006  brought  Cameroon  to  an important  development  goal. With the attainment of the HIPC completion point, Cameroon Exports a lump sum of financial resources of more than 1400billion FCFA.  These funds are Free and are out to achieve a sustainable improvement in living condition as well as significant Reduction in poverty. However, this research work is out to answer the following research question: To what extend does loans (credit) provided by commercial banks affect economic growth (GDP) in Cameroon.

1.4 Research Questions

1.4.1 Main Research Question

What is the role of bank marking on banking products of commercial banks in Cameroon?

1.4.2 Specific Research Objectives

• What are the effects of market face to face marketing such as TV, radio and billboard adverts on banking products of commercial banks in Cameroon?

• What are the effects of digital marketing on banking products of commercial bank in Cameroon?

1.5 Objectives of the Study

1.5.1 Main Objective

The main objective of this work is to assess the role of bank marketing on the banking product of commercial banks of Cameroon.

1.5.2 Specific Objectives 

• To analyze the role of face to face adverts on commercial banks
• To investigate the role of digital marketing on commercial banks.