1

ONUKEGBE EBERE GRACE

PG/MBA/08/53522

PG/M. Sc/09/51723

AN APPRAISAL OF THE APPLICATION OF DIRECT AND ONLINE

MARKETING IN THE BANKING INDUSTRY
(A STUDY OF ZENITH BANK PLC ENUGU)

A THESIS SUBMITTED TO THE DEPARTMENT OF MARKETING, FACULTY OF

BUSINESS ADMINISTRATION, UNIVERSITY OF NIGERIA ENUGU CAMPUS

PUBLIC ADMINISTRATION

DECEMBER, 2010

Digitally Signed by Webmasters Name

DN : CN = Webmasters name O= University of Nigeria, Nsukka
Webmaster OU = Innovation Centre
 2

TITLE PAGE

AN APPRAISAL OF THE APPLICATION OF DIRECT AND ONLINE MARKETING IN THE BANKING

INDUSTRY
(A STUDY OF ZENITH BANK PLC ENUGU)

BY

ONUKEGBE EBERE GRACE

PG/MBA/08/53522

BEING A DISSERTATION SUBMITTED

TO THE DEPARTMENT OF MARKETING
FACULTY OF BUSINESS ADMINISTRATION
UNIVERSITY OF NIGERIA
ENUGU CAMPUS

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE

AWARD OF MASTERS IN BUSINESS ADMINISTRATION (MBA)
MARKETING OF THE UNIVERSITY OF NIGERIA, ENUGU CAMPUS

DEPARTMENT OF MARKETING
FACULTY OF BUSINESS ADMINISTRATION
UNIVERSITY OF NIGERIA
ENUGU CAMPUS

DECEMBER, 2010.
 3

CERTIFICATION

I, Onukegbe Ebere Grace of the department of marketing, University of

Nigeria, Enugu campus hereby certify that this project work carried out by me is the

original work and has not been submitted in part or full to this university or any

higher institution of learning.

.
ONUKEGBE EBERE GRACE
PG/MBA/08/53522
 4

APPROVAL

This project work as carried out by Onukegbe Ebere Grace PG/MBA/08/53522

of the department of marketing, faculty of Business Administration, University of

Nigeria, Enugu Campus is hereby approved.

.
Dr. I.C Nwaizugbo Date
Supervisor

Dr. Mrs. J.O Nnabuko Date
Head of Department
 5

DEDICATION

This work is dedicated to David-Ugochi and Divine-Ogechi, Excel and Pearl

(my children), our all-time best performing portfolio, the joy of my universe, their

laughter make everything else seem insignificance.

 6

ACKNOWLEDGEMENTS

I am most grateful to God Almighty, whose mighty hand saw me though this

programme.

My special thank goes to my supervisor Dr. I.C Nwaizugbo for his simplicity and

objective criticisms on this work, only heaven can reward the act of humility you

display in your profession, remain blessed sir.

To my daddy, a mentor, Mazi M.C Onukegbe whose words of encouragement

boosted my strength to go for this programme. May God bless you with good health

and give you more glorious years.

To Pastor Chris Ekwere whose gentle guidance have shown me that for every

challenge, there is a spiritual solution. May God increase your spiritual insight.

I owe a debt of gratitude to my friend Adaora Ufondu (fondly called Ada onukegbe) I

climbed on her wing of motivation to run this programme, her talent and time also

made this work to be completed, you will never lack help in your lifetime.

My deepest appreciation goes to my father and mother, darling-Anto and my sisters;

they have been very supportive through this process. May God keep you all strong.

Finally my gratitude goes to my colleagues in Zenith Bank and all my friends for

their invaluable support and suggestions for the success of this work.

I LOVE YOU ALL.

 LIST OF TABLES

3.1 Staff and customer strength of zenith bank- - - -41

4.1 Questionnaire administration - - - - - -46

4.2 Different accounts operated by customers- - - -47

4.3 Sources of information about the banks products- - -47

4.4 Zenith banks product online accessibility- - - -48

4.5 Zenith banks strengths in marketing their online product and services

4.6 Zenith banks staff behaviour- - - - - - -49

4.7 Services rendered by zenith bank- - - - -50

4.8 Easy access to online products- - - - -50

4.9 ATM defrauds customers - - - - - - -51

4.10 Responsiveness to desired banking needs- - - - -52

4.11 Analysis of questionnaire for staff category- - - - -53

4.12 Engagement in direct and online marketing- - - -54

4.13 Direct marketing creates positive impact on customer retention- -55

4.14 Perceived benefits of online marketing- - - - -56

4.15 Benefits of direct marketing- - - - -57

4.16 Challenges of online marketing- - - -58

4.17 Condensed outcome of two questions for testing hypothesis I - --66

4.18 Contingency table of X2 for hypothesis I- - - - --66

4.19 Condensed outcome of two questions for testing hypothesis II- --68

4.20 Contingency table of X2 for hypothesis II- - - - -68

4.21 Condensed outcome of two questions for testing hypothesis III- --69

4.22 Contingency table of X2 for hypothesis III- - - - --70

4.23 Condensed outcome of two questions for testing hypothesis IV- --71

4.24 Contingency table of X2 for hypothesis IV- - - - --71

 ABSTRACT

The purpose of this research work is to appraise the application of direct and online
marketing in the Banking Industry. Direct and online marketing use a wide variety of
channels to reach prospects and customers. Participating companies can use these
strategies as instruments to rate their performance in relation to the best practices of high
performing product or service. The following objectives were formulated; to determine
the reasons for application of direct and online marketing, to evaluate how effective
channel of communication impacts on the banks profitability, to ascertain if the
application and usage of direct and online marketing is deceptive and fraudulent to the
banks customers, to determine if there are benefits tied to the application of direct and
online marketing. The study had a population of 2,401, out of which a sample size of 343
was realized using Taro Yamane formula. Questionnaire was primarily used for data
collection. 343 copies of questionnaire were distributed and 304 copies were collected.
The survey research method was adopted for the study while chi-square was used to test
the hypotheses. The findings showed that the application of direct and online marketing
communication enhances marketing of banking products and services, effective channel
of communication impacts positively on the profitability of the bank, application and
usage of direct and online marketing by zenith bank is deceptive and fraudulent to their
customers, the benefits tied to direct and online marketing attracts customers patronage.
The study concludes that direct and online marketing is a major index in increasing the
return on investment and productivity level of banks. The study recommends that Banks
should periodically organize seminars and symposia for their customers on the need to
safeguard their pin code and in doing so give them quality services on automated teller
machine.
 TABLE OF CONTENTS

Title page- - - - - - - - - - -i

Certification - - - - - - - - - -ii

Approval - - - - - - - - - - -iii

Dedication - - - - - - - - - - -iv

Acknowledgments- - - - - - - - -v

List of tables - - - - - - - - - -vi

Abstract - - - - - - - - - - -viii

Table of contents- - - - - - - - - -ix

CHAPTER ONE: Introduction- - - - - - - 1

1.0 Background of the study - - - - - - -1

1.1 Historical background of zenith bank- - - - - 3

1.2 Statement of the problem - - - - - - -4

1.3 Objectives of the study - - - - - - - -5

1.4 Research questions - - - - - - - -6

1.5 Formulation of hypotheses - - - - - - --6

1.6 Significance of the study - - - - - - -7

1.7 Scope and limitations of the study - - - - -- -8

1.8 Definition of terms - - - - - - - -8

References- - - - - - - - - - -11
Chapter two: Review of Related literature- - - - - -13

2.0 Introduction - - - - - - - - -13

2.1 Brief history of direct marketing and its application - - -15

2.2 Development of online marketing - - - - - -16

2.3 The growth of direct marketing in Nigeria - - - -19

2.3.1 E-business development in Nigeria - - - - - - 19

2.3.2 E-business practice in Nigeria - - - - - - - -21

2.3.3 Distinction between E-commerce and E-business - - - 23

2.3.4 The internet economy, E-business and E-commerce - - - -24

2.3.5 Different types of E-business - - - - - - - 24

2.3.6 B2B E-commerce - - - - - - - - 25

2.3.7 Benefits of B2B E-commerce in developing markets - - - 26

2.3.8 B2C E-commerce - - - - - - - - 27

2.3.9 B2G E-commerce - - - - - - - - 29

2.3.10 C2C E-commerce - - - - - - - - 29

2.3.11 C2B E-commerce - - - - - - - -30

2.3.12 M-business - - - - - - - - -30

2.4 Factors influencing E-business - - - - - - -31

2.5 Components of a typical successful E-business - - - - 33

2.6 Relevance of internet to E-commerce- - - - - - 35

2.6.1 Importance of intranet to a business engaging in E-business and E-

commerce - - - - - - - - - - - - - 35

2.7 Application of direct marketing in zenith bank - - - - 41

2.8 Application of online marketing in zenith bank - - - - 43

2.9 Strengths of direct marketing - - - - - - - 46

2.10 Weaknesses of direct marketing - - - - - - 46

2.11 Strengths of online marketing - - - - - - 47

2.12 Weaknesses of online marketing - - - - - - 48

2.13 Comparison of direct and online marketing - - - - - 48

2.14 Summary of reviewed related literature - - - - -50

References - - - - - - - - - - -52

Chapter three: Research methodology - - - - - -55

3.1 Research design - - - - - - - - -55

3.2 Sources of data collection- - - - - - -56

3.3 Instruments for data collection- - - - - - -56

3.4 Population of the study-- - - - - - - -57

3.5 Sampling procedure - - - - - - -57

3.6 Determination of the sample size-- - - - - -58

3.7 Method of data Analysis - - - - - -60

References- - - - - - - - - -61
Chapter four: Data presentation and analysis - - - - -62

4.1 Introduction - - - - - - - - -62

4.2 Testing of Hypotheses- - - - - - - -71

Chapter five: Summary, conclusion and Recommendation- - -78

5.1 Summary of findings - - - - - - - -78

5.2 Conclusion- - - - - - - - - -78

5.3 Recommendation- - - - - - - - -79

Bibliography-- - - - - - - - - -80

Appendices- - - - - - - - - - -82
 CHAPTER ONE

INTRODUCTION

1.0 BACKGROUND OF THE STUDY

History has shown that societies have unique aspect of Interaction which makes

life substantial for survival and co-existence. This unique aspect of interaction is referred

to as marketing. Marketing entails ideas which are transformed into products/ services

and all the activities that ensure its availability to the prospective customer for mutual

benefit.

For the scope of this work, marketing involves the process of communication by a

marketer of goods and services to prospective customers. This communication provides

information about features, condition of purchase, availability and image. Many are

intended as direct stimuli to a purchasing decision. It can also be viewed as the means by

which firms attempt to inform, persuade and remind consumers, directly or indirectly

about the products and brands that they sell in order to arouse purchasing instinct in the

sense of their prospective customers.

Marketing communication is indirect where marketer prospect interactions are

inhibited. This may be a resultant effect of one-way channel of communication as in the

use of broadcasting media such as television, Radio, Newspapers, and billboards. It could

also be as a result of interposition of an intermediary of some kind that does not have a

principal- agent a relationship with the marketer. E.g. a shop assistant in a retail

department store.

Marketing Communication makes available a wide range of opportunities for both

marketers and customers buying goods and services especially in this era of paperless
society in which direct contacts/ interactions is less due to the advancement in

information technology. Today, many industries and organizations do market their

product through internet, television and other related information technologies such as

electronic business (E-business) E.g. ATM telebanking, personal computer, banking and

the rest of them.

According to Clarke (1998) Marketing Communication are direct on the other

hand where;

The marketer conducts the communication directly with the prospect rather than

through intermediaries and or

The channel supports some degree of interaction between the marketer and the

prospect.

Direct marketing tends to stress the importance of gathering data about targets,

e.g. most importantly, it usually results in the creation of a DATABASE of

respondents. This gives rise to the use of the term Database marketing to refer to

marketing to people as individuals, on the basis of computer file. On-line marketing in

still marketing but marketing on internet seems to be more customer driven, more

information- base and more personal. The on-line market is global, immediate and

nonstop. Today, the explosion of media enables many more companies to sell their

products and services directly to customers without intermediaries. The existing media-

print and broadcast, catalogs, direct mail and telephone marketing have been

complemented by fax machines, e-mails, internet and on-line services. Banks are

increasingly using all these media to make direct offers to existing customers and to
identify new prospects. .Direct marketing enables companies to target their offers and to

measure their results more accurately.

Kotler (2001:549), observed that more of todays marketing is moving from the

market place into cyberspace. Direct marketing is being used increasingly across a wide

range of both consumer and organizational markets. In the relatively conservative

financial service industry, there has been a marked increase in the direct selling and direct

marketing of a wide range of banking facilities and insurance.

Banks have though seriously about ways of making their services more accessible

to their customers. Telephone banking, with processes designed to protect customers

security and to provide 24 hours coverage, allows customers easy access to their accounts

from their own homes whenever they want it. In addition to this, there is an expectation

that full-use of on-line banking with most banks is not for away. Zenith Bank Plc is

encouraging customers to use on-line services for retail transactions as well as share

trading and foreign currency transactions, loans usually still require face-to-face

meetings. Also with direct and on-line marketing, one can easily update information,

track customers, case of order processing and it is open 24/7 days and all year round.

Zenith bank Plc, In compliance with the recent CBN mandate to all banks, has improved

tremendously in their technology competence to drive the interest of their customers by

introducing line of products that could be accessible by those customers even in their

closets.
1.1 HISTORICAL BACKGROUND OF THE BANK

Zenith Bank plc is one of the biggest and most capitalized companies on Nigeria

Stock Exchange. The bank was established in May 1990 and started operations in July

same year as a commercial bank. It became a public limited company on June 17, 2004

and was listed on the Nigeria Stock Exchange on October 21, 2004. The bank presently

has a shareholder base of about one million, an indication of the strength of the Zenith

brand.

Operating from its head office located at 87, Ajose Adeogun Street, Victoria

Island, Lagos, Nigeria, with over three hundred and fifty (350) branches and business

offices nationwide, Zenith Bank has presence in all the state capitals, the federal capital

territory (FCT) as well as major cities and towns in Nigeria.

The bank also maintains a strong presence along the West African Coast with

wholly-owned subsidiaries in Accra, Ghana (Zenith Bank, Ghana) and Freetown, Sierra

Leone (Zenith Bank, Sierra Leone) as well as in Europe through Zenith Bank UK

Limited. This is in addition to a representative office in Johannesburg, South Africa.

At Zenith Bank, speed, efficiency and flexibility are abiding watchwords. The

banks customer-focused approach to service delivery consistently reinforces its value

creation processes towards assisting customers in achieving their goals and aspiration.

The bank has over the years strategically invested in and deployed cutting edge

technology and infrastructure to consistently improve service delivery. At Zenith Bank,

products and services are designed to suit the demands of corporate and individual

customers. The expertise developed over the years enables Zenith Bank to provide

efficient financial services including, but not limited to, corporate and Commercial
Banking Services, E-business solutions including local and international cards, treasury

and cash Management Services, Foreign Exchange and Trade Finance Services,

Funds/Assets Management, Private Banking, Investment Banking and Financial Advisory

Services. The banks array of other specialized financial services is delivered through its

subsidiaries, including Zenith Capital (the investment banking arm); Zenith securities

Ltd. (a securities trading and asset Management Company); Zenith registrars ltd (share

registration services); Zenith General Insurance Company Ltd can insurance and risk

underwriting company and Zenith Pensions Ltd (a pension custodian management

company).

Zenith Bank has pioneered several e-products and services to satisfy the yearnings

of its teeming customers. Such products include zmobile, a service which allows

customers transact their banking businesses using their mobile phones, a message other

system which enables customers monitor all transactions on their accounts via short text

messages delivered to their mobile phones.

At Zenith Bank, excellent service delivery and development of superior asset

quality, strong capital base, professionalism and corporate governance have provided the

grounds for consistently high returns to stakeholders. The bank maintains sound risk

management and corporate governance culture in line with global best practice.

Impressive growth pattern and performance over the years have earned Zenith

Bank excellent ratings from local and international agencies. Standard and poors

currently rates the bank BB-, which is the highest ever assigned to any Nigerian bank.

Fitch ratings currently rates Zenith Bank AA-(National) while Agusto & co, Nigerias

foremost rating Agency has, for the ninth Consecutive year, rated Zenith Bank Triple A
saying the bank is a financial institution of impeccable financial condition and

overwhelming capacity to meet obligations as and when they fall due.

In January 2009, Zenith Bank was also named Best Bank in Nigeria for 2008 by

the same influential publication. It also emerged best global Banking Champion at the

2009. This Day award for excellence. Also in 2009, January, the bank was adjudged the

most customer focused Bank in Nigeria (corporate, from a survey conducted by

foremost consulting firm, KPMG. The survey, which focused on corporate customers of

banks, including companies in a variety of sectors, found that they were most satisfied

with the services rendered by Zenith Bank. In June, 2009, Zenith Bank was recognized as

the bank with Best Asset Quality in Nigeria by financial standard newspaper. Earlier in

October, 2008, Zenith Bank was named Africas best global bank by the Africa Banker at

an impressive ceremony held at the IMF/World Bank meeting in Washington D.C. In

2007, Zenith was recognized by the council of the Nigerian Stock Exchange (NSE) as the

Quoted Company of the year.

1.2 STATEMENT OF THE PROBLEM

The recent mandate to banks by the regulatory body (CBN) which placed a limit

of (N10, 000,000) ten million naira Cheque encashment per transaction has posed a huge

threat to high volume cash-transactions. Prior to this mandate, high rate of robbery attack

on banks brew a lot of concern to banks on how to reduce cash transaction so as to

guarantee safety of the business.

 These developments compel banks to dove-tail into engaging electronic way of

running their normal business because no bank is ready to lose their customers patronage

or err against banking regulatory policies.

Given the need for security and business continuity, banks now employ the use of high-

tech mode of communicating and delivery of their products and services to potential and

existing customers. Direct and online marketing are applied by banks to create product

awareness and also used as a strategy for customer retention.

Despite the convenience of the online services, some customers who are not

literate enough will face challenges with the application of those electronic way of

transacting business thereby creating a problem to the bank on how to win, maintain

loyalty and retain such customers.

Again, poor infrastructural facilities pose a big threat to product accessibility. The

demand to engage in direct as well as online marketing for bank product has made the

empirical appraisal of their application imperative.

1.3 OBJECTIVE OF THE STUDY

The means by which banks services are communicated to their existing and

potential customers is very vital for their existence and survival. Therefore the major

objective of this study is to determine the effectiveness of direct and online marketing of

banking services.

Specifically, the study will seek to investigate amongst others:

a. The reasons/factors for applying direct and online marketing in Zenith bank.

b. Factors militating against good patronage of banks product and services.

 c. The effectiveness of direct and online marketing to the overall performance of

the bank.

1.4 RESEARCH QUESTIONS

This study will seek to answers to the following questions.

1. What are the reasons for applying direct and on-line marketing in Zenith Bank

Plc?

2. Does channel of Communication Impact on the profitability level of the bank?

3. Is the application and usage of direct and on-line marketing by Zenith bank

deceptive or fraudulent to customers?

4. Are there benefits tied to the application of direct and on-line marketing by

the bank?

1.5 FORMULATION OF HYPOTHESES

The following hypotheses, stated in null and alternate form are formulated for the

study.

Ho1 It is not necessary to apply direct and online marketing in communicating

banks products and services.

Ha1 It is necessary to apply direct and online marketing in communicating banks

products and services.

Ho2 Zenith Bank does not benefit from application of direct and online

marketing.

Ha2 Zenith Bank benefits from application of direct and online marketing.
Ho3 The application and usage of direct and online marketing by zenith bank is not

deceptive or fraudulent to their customers.

Ha3 The application and usage of direct and online marketing by zenith bank is

deceptive or fraudulent to their customers.

Ho4 Channel of Communication does not Impacts on the profitability level of the

bank.

Ha4 Channel of Communication Impacts on the profitability level of the bank.

1.6 SIGNIFICANCE OF THE STUDY

The significance of this study does not lie squarely on academics but also to

imbibe in banks and its customers diverse way to communicate and access their products

and services.

It is a marketing strategy that helps organizations to meet timely need of their

customers irrespective of their location.

This study will establish the impact of this marketing strategy on banks services

delivery. However, Nigerian banks may find the study useful as the effectiveness of these

marketing strategies will be highlighted and brought into greater focus. Generally, the

product of this work will be relevant to:

a. Commercial bank operators as this will enable them maximize the use of this

marketing strategy in communicating widely, their product and services to

their customers.

b. Bank customers will find it relevant because it will help them explore the path

of convenience in banking.
 c. Other researchers in the area bank service marketing will see this work as an

important leverage to their own research.

d. This work will appeal to the general public because it will add to the existing

body of literature and extended the frontiers of banking knowledge.

1.7 SCOPE AND LIMITATION OF THE STUDY

The research work is focused on the effectiveness of direct and online marketing

with emphasis on Zenith bank plc over the last three years till date. The scope of this

work would have been expanded to accommodate more commercial banks and a larger

time frame but for the constraint of time and resources.

Lack of infrastructural facilities, computers illiteracy of some customers and

uncooperative attitude of some respondents limits the accuracy of information required of

them on the questionnaire. These limitations however, will not invalidate the result of the

study.

1.8 DEFINITION OF TERMS

The following terms/concepts are defined in context to be more responsive to the

researchers usage.

1. Direct Marketing

According to Direct Marketing Association, Direct Marketing is defined as an

interactive marketing system that uses one or more advertising media to affect a

measurable response and/or transaction at any location.

2. Online Marketing

American Marketing Association defined online marketing as the use of internet

advertising to generate a response from your audience.

3. Internet

According to Julius O. Onah and Micheal J Thomas, Internet is a computer-based

world wide information network.

4. E-business

Micheal lear olimpi defined e-business as the use of the new family of

technologies available as the internet that enables people to communicate in new ways,

provide new business models, permit business models, permit businesses to operate more

efficiently and take advantage of the new global network economy.

5. Web-Pay

This is a web-based collection system that allows a client accept local and

international online payment for their product using the local debit cards.

6. Z-Mobile

This is a Zenith bank mobile banking service. It is card-based, menu driven and it

allows banking and payment of transaction on Java enabled mobile phones.

7. Electronic Mail

E-mail is a tool on the internet used in sending electronic, written messages

between individuals or groups of individuals, often geographically separated by large

distances.
8. E-Commerce

E-commerce is a platform where information and communications Technology

(ICT) is used in inter-business or inter-organizational transactions (transactions between

and among firms) and in business-to-customer transactions (transactions between firms

and individuals).

9. Corporate I-Bank (Automated Direct payment system Plus)

This is a secure and swift online electronic system which transfers authorized

payment instruction from a customers corporate account into any stipulated account. It

can be used to effect payments to zenith and non zenith account holders in a swift and

reliable technique.

10. Pay-Roll

This is an electronic payment solution that can be use to effect fast and timely

payment of salaries, allowances and recurring payment.

 REFERENCES

Philip Kotler (2001 & 2006) Marketing Management. 10th and 12th ed, London,

Prentice hall. Inc.

Royer Clarke (1998), Direct Marketing and privacy, Canberra, Xamax Conxultancy

phy Ltd.
 CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTION

The most successful companies of the next decade are those that will use digital

tools to the-invent the way they work Bill Gate.

The above statement finds an everlasting expression in the recent marketing trend

in the banking industry. Prior to this era, marketing communication was stream lined only

to the companies using word of mouth to create product awareness and consequently

attracting customers patronage.

Kotler and Keller: (2006:603), asserts that today marketing communication are

increasingly seen as an interactive dialogue between the company and its customer. To

make the sale to customer, marketers must work hard and work smart. Companies must

ask, not only how can we reach our customers? But also How can our customers reach

us? Kudos to technological breakthroughs, people can now communicate through

traditional media (news papers, magazines, radio, telephone, television, billboards) as

well as through computers, fax machines, cellular phones, papers and wireless

appliances.

According to Harvard business school essentials of marketing, marketing

communication simply means that the marketer communicates to the target market about

the availability, benefits and price of the companys product. It covers the whole range of

what occurs when the marketing plan is created by the marketing team in conjunction

with the overall company strategic objectives and input from others in the company who

are involved in the process of selling that product.

 All marketing communication comes back to knowing and understanding your

customer, fulfilling that customers needs, wants and demands without losing pace with

technological developments.

Nwosu (2006:221) defined marketing communication as the process by which

the marketer develops and presents an appropriate set of communication stimuli to a

defined target audience with the intention of eliciting a desired set of responses.

Customer service enhancement and competitive cost are factors that motivate

banks and other companies to move from mass communication to more targeted

communication and one-to-one dialogue. Companies are also using their sales force to

provide a human touch to their marketing.

Equality in capital base and homogeneity of services of all banks in Nigeria gave

rise to stiff competition in the industry. This necessitated the engagement of electronic

means of marketing.

Moreover, all organizations today operate in a rapidly shifting environment and

change comes in different form such as globalization and technological advances and

how banks respond to these changes determine the chance for their survival. However, it

is essential to give a definition of direct and online marketing.

Direct Marketing Defined

Clarke (1998:12) defined marketing as the communication by a marketer to a

prospect without an intermediary via a medium that supports some degree of interaction.

Kotler and Keller :( 2006:604) delineates direct marketing as the use of

consumers-direct channels to reach and deliver goods and services to customers without

using marketing middle men.

 Direct marketing is a database-driven process of direct communication with

targeted customers or prospects using any medium to obtain a measurable response or

transaction via one or multiple channels. It can also be viewed as the practice of

delivering promotional messages directly to potential customers on an individual basis as

opposed to through a mass medium.

Online Marketing Defined

Okorie (1987:22) defined it as a form of advertising that involves developing a

mailing list of the target customers; including their mail addresses and sending

advertisement materials that elicit their responses to them. Online marketing is the use of

electronic mail through the internet to prompt communication between companies, co-

workers and between other individuals.

Kotler (2001:666) asserts that marketers can do online marketing by creating an

electronic presence on the internet- a company offer, information about its history,

mission and philosophy, product and services and locations. Online marketing is a

platform where the consumer gives permission and controls the interaction instead of the

marketer.

2.1 A BRIEF HISTORY OF DIRECT MARKETING AND ITS

APPLICATION

Direct mail has been the workhorse of the marketing world since Montgomery ward

launched its first catalogue in 1872. Back then, the idea of offering a world of goods

through the U.S postal service was revolutionary. To our farm dwelling ancestors, for

whom shopping was a three-day trip with wooden cart and horse over rough terrain,
ordering coal burning stoves, ice boxes, dresses and harnesses through the Montgomery

ward, sears and other catalogue was a blessing.

What helped the start of direct mail industry is the ability of the U.S postal system

to reach nearly anyone irrespective of their location. This achievement was the catalyst

for the direct mail surge. The growth of mass-produced items, Americas rapid expansion

and reconstruction period after the civil war also helped full the rising middle class and

their appetite for never, better and more fashionable things.

Today, the growth is online. Most marketers lump social media marketing and

web 2.0 technologies in with direct response marketing.

The concept of globalization has revealed the importance of direct marketing as it

affects companies that engage in international businesses. Industries within and across the

country become more responsive to direct marketing as a means to communicate and

deliver their products and services to potential and existing customers.

2.2 DEVELOPMENT OF ONLINE MARKETING

Online marketing has become an integral part of peoples lives, especially the

ones living in urbanized surroundings. Everyday customers are exposed to several

publicity gimmicks, thrown at us in varied forms on the World Wide Web. Buying and

selling of products and services on the internet.

When internet was first introduced, very few businessmen actually realized its

potential as a marketing tool. About 12 years ago, the biggest of entrepreneurs declared it

unfit for commercial purposes. Back then, it was just used for simpler tasks like emailing

and data transfer.

 One of the very first internet providers, Netscape, brought the online world into

prominence by exploring its commercial potentiality. The company wanted the web to be

more accessible to people willing to buy and sell things online. In August, 1995,

Netscape went public with its shares. Within weeks, public interest swelled up and

advertisers lapped up at this golden opportunity. The wide reach, easy accessibility and

cost-effectiveness of internet made online marketing a highly sought-after service.

Netscapes phenomenal success gave birth to the internet boom that has gone on

to affect global businesses in a major way. With time, this medium has gained

prominence in the lives of entrepreneurs who wish to promote their business using this

inexpensive and global platform. Statistic also point to the immense success that this

mass medium sparked off. Americans and Europeans get the top honours in terms of

marketings transaction held online. In fact, accordingly to sources, more than one-third

of web-users are into online marketing. This trend is predicted to dominate marketing

circles, as reach of the web threatens to overpower the impact of print and electronic

forms of media.

Terms like search engine marketing, viral marketing, e-mail marketing and

affiliate marketing have been integrated into the wide sphere of the virtual marketplace.

Ideal for almost all types of products and services, irrespective of the size of the business,

online marketing promises to rein the world of trade with its simple and effective

guidelines.

The IT revolution is at hand. Previously, It is only associated with computers.

Now, IT extends its services to other branches like Medicine, Robotics, Banking and a lot

more. Marketing, a small branch of commerce, was able to extend more of its tentacles
by utilizing its services through online or internet promotion. From the word market

alone, one is capable of grasping its meaning. Since, the actual selling and small time

promotion are done in the market, thus, it is but right to say that marketing is the business

of advertising, promoting and selling of goods and services. Online marketing follows

this exact concept but only done through online advertisements and/or promotions and

can be accessed by anybody through the internet.

After man discovered agriculture and improving its techniques, man was able to

produce more food products which, unfortunately, cannot be consumed by his family or

his entire community in due time. So before those products will expire, man decided to

trade it for something else like precious stones, other food products and services. After

some time, the use of money as medium for payments, made almost anybody rich by

merely selling goods in the market. The presence of competitors makes man innovative in

disposing and selling his products, and one such useful technique is marketing through

advertisements and promotions. Apart from merely stacking goods in the market for

consumers to purchase, there are other simple ways to market ones goods. Public

speaking, as means of public advertising easily catches the attention of many consumers.

The way marketers of food supplement perform public speaking that promise easy money

and wealth overnight, entice the people into purchasing products and becoming marketers

as well. Marketing strategies greatly improved, together with the birth of television and

utilization of print. Promotions of goods are mostly done through print advertisement

because almost everybody can read and purchase newspapers, magazines and other

printed circulation. The use of television advertisement, employing advanced graphical

techniques, helps a lot in affecting the consumers psychology into purchasing goods and

services.

With marketing as a key player in affecting ones senses into purchasing a

product, many business enthusiasts though of utilizing the advancing and unstoppable

progress of online accessibility. Today, it is common to see advertisement and

promotions upon one single entry in one website. The advertisements that all of us can

see in the internet are the products of online marketing.

Several ways by which companies do market their products and services using

online marketing include Search Engine Optimization, Banner advertisement, newsgroup

or forum and E-mail.

What is fortunate in online marketing is that simple product could reach out to

millions of people throughout the world without spending much in actual and manual

promotions in different countries.

2.3 THE GROWTH OF DIRECT MARKETING AND E-BUSINESS

DEVELOPMENT IN NIGERIA

The growth of direct marketing is as a result of many factors challenging the

business environment which includes shortage of retail sales reps. Overcrowded markets,

high cost o driving, traffic congestion, lack of parking lot in shopping complex, Robbery

attack, long queuing system in banks to mention but this few. Increasingly, business

marketers have turned to direct mail and telemarketing in response to high and increasing

cost of reaching business market through the sales force.

2.3.1 E-Business Development in Nigeria

E-business is the use of electronic communication and digital information

processing technology in business transactions to create, transform and redefine

relationships for value organizations and individuals.

Electronic business refers to a wide range of online business activities for product

and services. It also pertains to any form of business transaction in which the parties

interact electronically rather than by physical exchange or direct physical contact.

With developments in the internet and web-based technologies, distinctions

between traditional markets and the global electronic market place such as business

capital size, among others are gradually being narrowed down. The name of the game is

strategic positioning,; the ability of a company to determine emerging opportunities and

utilize the necessary human capital skills (such as intellectual resources) to make the

most of these opportunities through c-business strategy that is simple, workable and

practicable within the context of a global information milieu and new economic

environment.

Growth in e-business is slow but steady. The vast improvement in

telecommunications services in the country as illustrated by the explosion of subscribers

and users of GSM (global system for mobile communication), is further underscored by a

surge in private telecom operators (PTOs) offering fixed wireless services, which offer

data and voice transfer. Hence, this supports internet use even in some of the more rural

parts of the country. This phenomenon not only lets Nigerians communicate with the rest

of the country and the world from the areas that had been completely cut off, but they are

also getting used to the phenomenon of modern communications, including GSM, short
message service (SMS) and e-mail. Furthermore, with the reduction in tariffs already

implemented by Nigeria telecommunications (NITEL), the national telecoms carrier and

further cuts expected, telecom service is becoming more affordable and essential to many

Nigerians and business.

According to the Economist intelligence Unit, the Stock of personal computers

(PCS) per 1,000 persons grew from 10.66 in 2004 to 11.09 in 2005 and to about 43.3 in

2008. The biggest impediment to the growth of e-business is low PC penetration. But

cheap Asian technologies and falling microchip prices have fuelled a market in clones as

well as branded PCs.

The introduction of e-business service is hampered by a lack of public awareness

on how to use the technologies. GSM phone technology (introduced in August 2001),

however, is gradually drawing consumes and there has been a rapid growth in electronic-

cash-transfer services such as Western Union, Money gram and Traveller in recent years.

Electronic banking is on area of e-business that has proven successful in Nigeria.

Virtually all banks in Nigeria offer online, real-time banking services. Moreover, banks

that cannot offer these services are increasingly losing their customers. Online, real time

banking systems have now become commonplace as customers are offered the flexibility

of operating an account in any branch of their bank network. The online service lets

customers conduct a variety of banking activities in any location of a particular bank.

These services include, among other things, deposits, withdrawals, transfers and the

issuing of draft.

Banks are also increasingly moving to card-based payment solutions beyond the

widely accepted electronic purse, including debit and credit cards though these are still
slow to take off. The most likely service to roll out on a large scale in Nigeria is an ATM

system. A few banks started the ATM consortium in 2003 to set up ATM across the

country and it is gearing up in raising finance.

2.3.2 E-Business Practice in Nigeria

In the emerging global economy, e-commerce and e-business have increasingly

become a necessary component of business strategy and a strong catalyst for economic

development. The integration of information and communications technology (ICT) in

business has revolutionized relationships within organizations and those between and

among organizations and individuals. Specifically, the use of ICT in business has

enhanced productivity, encouraged greater customer participation, and enabled mass

customization, besides reducing costs.

With developments in the Internet and Web-based technologies, distinctions

between traditional markets and the global electronic marketplace-such as business

capital size, among others are gradually being narrowed down. The name of the game is

strategic positioning, the ability of a company to determine emerging opportunities and

utilize the necessary human capital skills (such as intellectual resources) to make the

most of these opportunities through an e-business strategy that is simple, workable and

practicable within the context of a global information milieu and new economic

environment. With its effect of levelling the playing field, e-commerce coupled with the

appropriate strategy and policy approach enables small and medium scale enterprises to

compete with large and capital-rich businesses.

 The development of s-business is creating new opportunities only that not many

people especially in Nigeria are aware. The mindset, the new thinking is just as important

as ICT infrastructure and technology developments. The new economy requires a real

and strong public demand for the new technologies and e-business. This brings to focus

the important questions about e-business in Nigeria. For instance: what is the level of

digital literacy? Is ICT or e-business a priority as you battle to face the harsh reality of

poverty? What is the ICT and e-business culture in Nigeria? Is the promotion of

technology education priority? Is raising the general public awareness about these

opportunities a priority? Do the people and institutions realize the need to be agile, open

to change as well as the need to have the ability to exploit opportunity?

Before delving into these issues, it is pertinent to properly situate e-business and its

connotations.

2. Concept of e-Business/e-Commerce

Electronic business or e-business refers to a wide range of online business

activities for products and services. It also pertains to any form of business transaction

in which the parties interact electronically rather than by physical exchanges or direct

physical contact.

E-business is usually associated with buying and selling over the Internet, or

conducting any transaction involving the transfer of ownership or rights to use goods or

services through a computer-mediated network. Though popular, this definition is not

comprehensive enough to capture recent development in this new and revolutionary

business phenomenon. A more complete definition is: E-business is the use of electronic

communications and digital information processing technology in business transactions

to create, transform, and redefine relationship for value creation between or among

organizations, and between organizations and individuals.

International Data Corp (IDC) estimates the value of global e-commerce in 2008

at US$950.38 billion. This is projected to climb to as high as US$9.14 trillion by 2012.

IDC also predicts an increase in Asias percentage share in worldwide e-commerce

revenue from 5% in 2005 to 18% in 2009.

2.3.3 Distinction between E-Commerce and E-business

While some use e-commerce and e-business interchangeably, they are distinct

concepts. In e-commerce, information and communications technology (ICT) is used in

inter-business or inter-organizational transactions (transactions between and among

firms/organizations) and in business-to-consumer transactions (transaction between

firms/organizations and individuals).

In e-business, on the other hand, ICT is used to enhance ones business. It

includes any process that a business organization (either a for-profit, governmental or

non-profit entity) conducts over a computer-mediated network. A more comprehensive

definition of e-business is: The transformation of an organizations processes to deliver

additional customer value through the application of technologies, philosophies and

computing paradigm of the new economy.

Three primary processes are enhanced in e-business:

i. Production Process: Which include procurement, ordering and replenishment of

stocks; processing of payments; electronic links with suppliers; and production control

processes, among others;

ii. Customer-Focused Process: Which include promotional and marketing efforts,

selling over the Internet, processing of customers purchase orders and payments, and

customer support, among others; and

iii. Internal Management Processes: Which include employee services, training

internal information-sharing, video-conferencing, and recruiting. Electronic applications

enhance information flow between production and sales forces to improve sales force

productivity. Workgroup communications and electronic publishing of internal business

information are likewise made efficient.

2.3.4 Is the Internet Economy Synonymous with e-commerce and e-business?

The Internet economy is a broader concept than e-commerce and e-business. It

includes e-commerce and e-business.

The Internet economy pertains to all economic activities using electronic

networks as a medium for commerce or those activities in both building the networks

linked to the Internet and the purchase of application services such as the provision of

enabling hardware and software and network equipment for Web-based/online retail and

shopping malls (or e-malls). It is made up of three major segments: physical (ICT)

infrastructure, business infrastructure, and commerce.

2.3.5 Different Types of E-Business

The major different types of e-business are: business-to-business (B2B); business

to-consumer (B2C); business-to-government (B2G); consumer-to-consumer (C2C); and

mobile business (m-business).

2.3.6 B2B e-commerce

B2B e-commerce is simply defined as e-commerce between companies. This is

the type of e-commerce that deals with relationships between and among businesses.

About 80% of e-commerce is of this type, and most experts predict that B2B e-

commerce will continue to grow faster than the B2C segment.

The B2B market has two primary components: e-restructure and e-markets. E-

restructure is the architecture of B2B, primary consisting of the following:

Logistics- transportation, warehousing and distribution (e.g., Procter and

Gamble);

Application service providers-deployment, hosting and management of packaged

software from a central facility (e.g. Oracle and Link share);

Outsourcing of functions in the process of e-commerce, such as Web-hosting,

security and customer care solutions (e.g., outsourcing providers such as e share,

net Sales, IXL Enterprises and Universal Access);

Auction solutions software for the operation and maintenance of real-time

auctions in the Internet (e.g., Moai technologies and Open Site Technologies);

Content management software for the facilitation of Web site content

management and delivery (e.g., Interwoven and procure Net); and

 Web-based commerce enables (e.g., Commerce one, a browser-based, XML

enabled purchasing automation software).

E- Markets are simply defined as Web sites where buyers and sellers interact with

each other and conduct transactions.

The more common B2B examples and best practice models are IBM, Hewlett Packard

(HP), Cisco and Dell, Cisco, for instance, receives over 90% of the product orders over

the Internet.

Most B2B applications are in the areas of supplier management (especially

purchase order processing), inventory management (i.e., managing order-ship-bill

cycles), distribution management (especially in the transmission of shipping documents),

channel management (i.e., electronic payment systems or EPS).

2.3.7 Benefits of B2B E-Commerce in Development Markets

The impact of B2B markets on the economy of developing countries is evident in

the following:

Transaction Costs: There are three cost areas that are significantly reduced through the

conduct of B2B e-commerce. First is the reduction of search costs, as buyers need not go

through multiple intermediaries to search for information about suppliers, products and

prices as in a traditional supply chain. In terms of effort, time and money spent, the

Internet is a more efficient information channel than its traditional counterpart. In B2B

markets, buyers and sellers are gathered together into a single online trading community,

reducing search costs even further. Second is the reduction in the costs of processing

transaction (e.g. invoices, purchase orders and payment schemes), as B2B allows for the
automation of transaction processes and therefore, the quick implementation of the same

compared to other channels (such as the telephone and fax). Efficiency in trading

processes and transactions is also enhanced through the B2B e-markets ability to process

sales through online auctions. Third, online processing improves inventory management

and logistics.

Disintermediation: Through B2B e-markets, suppliers are able to interact and transact

directly with buyers, thereby eliminating intermediaries and distributors. However, new

forms of intermediaries are emerging. For instance, e-markets themselves can be

considered as intermediaries because they come between suppliers and customers in the

supply chain.

Transparency in Pricing: Among the more evident benefits of e-markets is the increase

in price transparency. The gathering of a large number of buyers and sellers in a single e-

market reveals market price information and transaction processing to participants. The

Internet allows for the publication of information on a single purchase or transaction,

making the information readily accessible and available to all members of the e-market.

Increased price transparency has the effect of pulling down price differentials in the

market. In this context, buyers are provided much more time to compare prices and make

better buying decisions.

Moreover, B2B e-markets expand borders for dynamic and negotiated pricing

wherein multiple buyers and sellers collectively participate in price-setting and two-way

auctions. In such environments, prices can be set through automatic matching of bids and

offers. In the e-market place, the requirements of both buyers and sellers are thus
aggregated to reach competitive prices, which are lower than those resulting from

individual actions.

Economies of scale and network effects: The rapid growth of B2B e-markets creates

traditional supply-side cost-based economies of scale. Furthermore, the bringing together

of a significant number of buyers and sellers provides the demand-side economies of

scale or network effects. Each additional incremental participant in the e-market creates

value for all participants in the demand side. More participants form a critical mass which

is to key to attract more users to an e-market.

2.3.8 B2C e-commerce

Business-to-consumer e-commerce, or commerce between companies and

consumers, involves customers gathering information; purchasing physical goods (i.e.,

tangibles such as books or consumer products) or information goods (or goods of

electronic material or digitized content, such as software, or e-books); and, for

information goods, receiving products over an electronic network. It is the second largest

and the earliest form of e-commerce. Its origins can be traced to online retailing (or e-

tailing). 13 Thus, the more common B2C business models are the online retailing

companies such as Amazon.com, Drugstore.com, Beyond.com, Barnes and Noble and

ToysRus. Other B2C examples involving information goods are E-Trade and Travelocity.

The more common applications of this type of e-commerce are in the areas of

purchasing products and information, and personal finance management, which pertain to

the management of personal investments and finances with the use of online banking

tools (e.g., Quicken).

 E-Marketer estimates that worldwide B2C e-commerce revenues will increase

from US$59.7 billion in 2000 to US$1,428 billion by 2008. Online retailing transactions

make up a significant share of this market. E-Marketer also estimates that in the Asia-

Pacific region, B2C revenues, while registering a modest figure compared to B2B,

nonetheless went up to $8.2 billion by the end of 2001, with that figure doubling at the

end of 2002-at total worldwide B2C sales below 10%.

B2C e-commerce reduces transactions costs (particularly search costs) by

increasing consumer access to information and allowing consumers to find the most

competitive price for a product or service. B2C e-commerce also reduce market entry

barriers since the cost of putting up and maintaining a Web site is much cheaper than

installing a brick-and-mortar structure for a firm. In the case of information goods,

B2C e-commerce is even more attractive because it saves firms from factoring in the

additional cost of a physical distribution network. Moreover, for countries with a growing

and robust Internet population, delivering information goods becomes increasingly

feasible.

2.3.9 B2G e-commerce

Business-to-government e-commerce or B2G is generally defined as commerce

between companies and the public sector. It refers to the use of the Internet for public

procurement, licensing procedures, and other government-related operations. This kind of

e-commerce has two features: first, the public sector assumes a pilot/leading role in

establishing e-commerce; and second, it is assumed that the public sector has the greatest

need for making its procurement system more effective.

 Web-based purchasing policies increase the transparency of the procurement

process and reduce the risk of irregularities. To date, however, the size of the B2G

ecommerce market as a component of total e-commerce is insignificant, as government e-

procurement systems remain undeveloped.

2.3.10 C2C e-commerce

Consumer-to-consumer e-commerce or C2C is simply commerce between private

individuals or consumers. This type of e-commerce is characterized by the growth of

electronic marketplaces and online auctions, particularly in vertical industries where

firms/businesses can bid for what they want form among multiple suppliers. It perhaps

has the greatest potential for developing new markets.

This type of e-commerce comes in at least three forms:

Auctions facilitated at a portal, such as eBay, which allows online real-time

bidding on items being sold in the Web;

Peer-to-peer systems, such as the Napster model ( a protocol for sharing files

between users used by chat forums similar to IRC) and other file exchange and

later money exchange models; and

Classified ads at portal sites such as Excite Classifieds and e-Wanted (an

interactive, online marketplace where buyers and sellers can negotiate and which

features Buyer Leads & Want Ads).

2.3.11 Consumer-to-Business (C2B)

Consumer-to-business (C2B) transactions involve reverse auctions, which

empower the consumer to drive transactions. A concrete example of this when competing

airlines gives a traveller best travel and ticket offers in response to the travellers post that

she wants to fly from New York to San Francisco. There is little information on the

relative size of global C2C e-commerce. However, C2C figures of popular C2C sites

such as eBay and Napster indicate that this market is quite large. These sites produce

millions of dollars in sales every day.

2.3.12 M-business

M-commerce (mobile business) is the buying and selling of goods and services

through wireless technology-i.e., handheld devices such as cellular telephones and

personal digital assistants (PDAs). Japan is seen as a global leader in m-business.

As content delivery over wireless devices becomes faster, more secure, and

scalable, some believe that rn-commerce will surpass wire line e-commerce as the

method of choice for digital commerce transactions. This may well be true for the Asia-

Pacific where there are more mobile phone users than there are Internet users.

Industries affected by m-business include:

Financial services, including mobile banking (when customers use their handheld

devices to access their accounts and pay their bills), as well as brokerage services

(in which stock quotes can be displayed and trading conducted from the same

handheld device);
 Telecommunications, in which service changes, bill payment and account reviews

can all be conducted from the same handheld device;

Service/retail, as consumers are given the ability to place and pay for orders on-

the- fly; and

Information services, which include the delivery of entertainment, financial news,

sports figures and traffic updates to a single mobile device.

2.4 FACTORS INFLUENCING E-BUSINESS

There are at least three major forces influencing e-business: economic forces,

marketing and customer interaction forces, and technology, particularly multimedia

convergence.

Economic forces: One of the most evident benefits of e-business is economic efficiency

resulting from the reduction in communications costs, low-cost technological

infrastructure, speedier and more economic electronic transactions with suppliers, lower

global information sharing and advertising costs, and cheaper customer service

alternatives.

Economic integration is either external or internal. External integration refers to

the electronic networking of corporations, suppliers, customers/clients, and independent

contractors into one community communicating in a virtual environment (with the

Internet as medium). Internal integration, on the other hand, is the networking of the

various departments within a corporation, and of business operations and processes. This

allows critical business information to be stored in a digital form that can be retrieved

instantly and transmitted electronically. Internal integration is best exemplified by

corporate intranets. Among the companies with efficient corporate intranets are Procter

and Gamble, IBM, Nestle and Intel.

Market Forces: Corporations are encouraged to use e-commerce in marketing and

promotion to capture international markets, both big and small. The Internet is likewise

used as a medium for enhanced customer service and support. It is a lot easier for

companies to provide their target consumers with more detailed product and service

information using the Internet.

Technology Forces: The development of ICT is a key factor in the growth of

ecommerce. For instance, technological advances in digitizing content, compression and

the promotion of open systems technology have paved the way for the convergence of

communication services into one single platform. This in turn has made communication

more efficient, faster, easier, and more economical as the need to set up separate

networks for telephone services, television broadcast, cable television, and Internet

access is eliminated. From the standpoint of firms/businesses and consumers, having only

one information provider means lower communications costs.

Moreover, the principle of universal access can be made more achievable with

convergence. At present the high costs of installing landlines in sparsely populated rural

areas is a disincentive to telecommunications companies to install telephones in these

areas. Installing landlines in rural areas can become more attractive to the private sector if

revenues from these landlines are not limited to local and long distance telephone

charges, but also include cable TV and Internet charges. This development will ensure

affordable access to information even by those in rural areas and will spare the

government the trouble and cost of installing expensive landlines.

2.5 COMPONENTS OF A TYPICAL SUCCESSFUL E-BUSINESS

TRANSACTION LOOP?

E-business does not refer merely to a firm putting up a Web site for the purpose of selling

goods to buyers over the internet. For c-business to be a competitive alternative to

traditional commercial transactions and for a firm to maximize the benefits of e-business,

a number of technical as well as enabling issues have to be considered.

A typical e-business transaction loop involves the following major players and

corresponding requisites:

The Seller should have the following components:

A corporate Web site with c-commerce capabilities (e.g., a secure transaction

server);

A corporate intranet so that orders are processed in an efficient manner; and

IT-literate employees to manage the information flows and maintain the e-

commerce system.

Transaction partners include:

Banking institutions that offer transaction clearing services (e.g., processing credit

card payments and electronic fund transfers);

National and international freight companies to enable the movement of physical

goods within, around and out of the country. For business-to-consumer

transactions, the system must offer a means for cost-efficient transport of small

packages (such that purchasing books over the Internet, for example, is not

prohibitively more expensive than buying from a local store); and

 Authentication authority that serves as a trusted third party to ensure the integrity

and security of transactions.

Consumers (in a business-to-consumer transaction) who:

Form a critical mass of the population with access to the Internet and disposable

income enabling widespread use of credit cards; and

Possess a mindset for purchasing goods over the Internet rather than by physically

inspecting items.

Firms/Businesses (in a business-to-business transaction) that together form a critical mass

of companies (especially within supply chains) with Internet access and the capability to

place and take orders over the Internet.

Government, to establish:

A legal framework governing e-business transactions (including electronic

documents, signatures, and the like); and

Legal institutions that would enforce the legal framework (i.e., laws and

regulations) and protect consumers and businesses from fraud, among others.

And finally, the Internet, the successful use of which depends on the following:

A robust and reliable Internet infrastructure; and

A pricing structure that doesnt penalize consumers for spending time on and

buying goods over the Internet (e.g., a flat monthly charge for both ISP access and

local phone calls).

For e-business to grow, the above requisites and factors have to be in place. The least

developed factor is an impediment to the increased uptake of e-business as a whole. For

instance, a country with an excellent Internet infrastructure will not have high e-business
figures if banks do not offer support and fulfilment services to e-business transactions. In

countries that have significant e-business figures, a positive feedback reinforces each of

these factors.

2.6 HOW IS THE INTERNET RELEVANT TO E-COMMERCE?

The Internet allows people from all over the world to get connected inexpensively

and reliably. As a technical infrastructure, it is a global collection of networks, connected

to share information using a common set of protocois.23 Also, as a vast network of

people and information, the Internet is an enabler for e-commerce as it allows businesses

to showcase and sell their products and services online and gives potential customers,

prospects, and business partners access to information about these businesses and their

products and services that would lead to purchase.

Before the Internet was utilized for commercial purposes, companies used private

networks-such as the EDT or Electronic Data Interchange-to transact business with each

other. That was the early form of e-commerce. However, installing and maintaining

private networks was very expensive. With the Internet, e-cornmerce spread rapidly

because of the lower costs involved and because the Internet is based on open standards.

2.6.1 How important is an intranet for a business engaging in e-business and

ecommerce?

An intranet aids in the management of internal corporate information that may be

interconnected with a companys e-commerce transactions (or transactions conducted

outside the intranet). Inasmuch as the intranet allows for the instantaneous flow of
internal information, vital information is simultaneously processed and matched with data

flowing from external e-commerce transactions, allowing for the efficient and effective

integration of the corporations organizational processes. In this context, corporate

functions, decisions and processes involving e-commerce activities are more coherent

and organized.

The proliferation of intranets has caused a shift from a hierarchical command-and

control organization to an information-based organization. This shift has implications for

managerial responsibilities, communication and information flows, and workgroup

structures.

E-commerce serves as an equalizer. It enables start-up and small- and medium-sized

enterprises to reach the global market.

E-commerce makes mass customization possible. E-commerce applications in this

area include easy-to-use ordering systems that allow customers to choose and order

products according to their personal and unique specifications. For instance, a car

manufacturing company with an e-commerce strategy allowing for online orders can

have new cars built within a few days (instead of the several weeks it currently takes to

build a new vehicle) based on customers specifications. This can work more effectively

if a companys manufacturing process is advanced and integrated into the ordering

system.

E-commerce allows network production. This refers to the parcelling out of the

production process to contractors who are geographically dispersed but who are

connected to each other via computer networks. The benefits of network production

include: reduction in costs, more strategic target marketing, and the facilitation of selling
add-on products, services, and new systems when they are needed. With network

production, a company can assign tasks within its non-core competencies to factories all

over the world that specialize in such tasks (e.g., the assembly of specific components).

3. Importance of e-business to the consumer

In C2B transactions, customers/consumers are given more influence over what

and how products are made and how services are delivered, thereby broadening consumer

choices. E-commerce allows for a faster and more open process, with customers having

greater control.

E-commerce makes information on products and the market as a whole readily

available and accessible, and increases price transparency, which enable customers to

make more appropriate purchasing decisions.

Transformation of Business Relationship through e-business

E-business transforms old economy relationships (vertical/linear relationships) to

new economy relationships characterized by end-to-end relationship management

solutions (integrated or extended relationships).

E-business facilitates organization networks, wherein small firms depend on

partner firms for supplies and product distribution to address customer demands more

effectively. To manage the chain of networks linking customers, workers, suppliers,

distributors, and even competitors, an integrated or extended supply chain management

solution is needed. Supply chain management (SCM) is defined as the supervision of

materials, information, and finances as they move from supplier to manufacturer to

wholesaler to retailer to consumer. It involves the coordination and integration of these

flows both within and among companies. The goal of any effective supply chain
management system is timely provision of goods or services to the next link in the chain

(and ultimately, the reduction of inventory within each link).

There are three main flows in SCM, namely:

The product flow, which includes the movement of goods from a supplier to a

customer, as well as any customer returns or service needs;

The information flow, which involves the transmission of orders and the update of

the status of delivery; and

The finances flow, which consists of credit terms, payment schedules, and

consignment and title ownership arrangements.

Some SCM applications are based on open data models that support the sharing of

data both inside and outside the enterprise, called the extended enterprise, and include

key suppliers, manufacturers, and end customers of a specific company. Shared data

resides in diverse database systems, or data warehouses, at several different sites and

companies. Sharing this data upstream (with a companys suppliers) and downstream

(with a companys clients) allows SCM applications to improve the time-to-market of

products and reduce costs. It also allows all parties in the supply chain to better manage

current resources and plan for future needs.

Relevant components of an e-business model an e-business model must have:

1. A shared digital business infrastructure, including digital production and

distribution technologies (broadband/wireless networks, content creation technologies

and information management systems), which will allow business participants to create

and utilize network economies of scale32 and scope33

2. A sophisticated model for operations, including integrated value chains-both supply

chains and buy chains;

3. An e-business management model, consisting of business teams and/or partnerships;

and

4. Policy, regulatory and social systems-i.e., business policies consistent with ecommerce

laws, teleporting/virtual work, distance learning, incentive schemes, among others.

4. E-business Applications in Developing Countries Problems and Prospects Various

applications of e-commerce are continually affecting trends and prospects for business

over the Internet, including e-banking, e-tailing and online publishing/online retailing.

A more developed and mature e-banking environment plays an important role in

ecommerce by encouraging a shift from traditional modes of payment (i.e., cash, checks

or any form of paper-based legal tender) to electronic alternatives (such as e-payment

systems), thereby closing the e-commerce loop.

4. What are the existing practices in developing countries with respect to

buying and paying online?

In most developing countries, the payment schemes available for online

transactions are the following:

A. Traditional Payment Methods

Cash-on-delivery: Many online transactions only involve submitting purchase

orders online. Payment is by cash upon the delivery of the physical goods.
 Bank payments: After ordering goods online, payment is made by depositing cash

into the bank account of the company from which the goods were ordered.

Delivery is likewise done the conventional way.

B. Electronic Payment Methods

Innovations affecting consumers include credit and debit cards, automated teller

machines (ATMs), stored value cards, and e-banking.

Innovations enabling online commerce are e-cash, e-checks, smart cards, and

encrypted credit cards. These payment methods are not too popular in developing

countries. They are employed by a few large companies in specific secured

channels on a transaction basis.

Innovations affecting companies pertain to payment mechanisms that banks

provide their clients, including inter-bank transfers through automated clearing

houses allowing payment by direct deposit.

5. Need for ICT and E-Business Awareness in Nigeria.

Information is a critical resource, infrastructure is essential but people are the

most important resource in todays global knowledge-based economy. People will drive

the knowledge economy. It is the knowledge, skills, ideas and creative efforts of people

that lead to innovation. The main source of value and competitive advantage in the new

economy is human and intellectual capital.

How do we ensure the availability of quality human capital - people that can not

only meet the demands of keeping up with technological changes, but also can drive

change and innovation?

 Countries that are forward-looking in the realm of ICT development have an

interest in empowering their citizens with ICT and e-business skills. The people are the

future so they must be equipped with skills for the future - skills for the digital age.

Education and training are fundamental to the widespread and effective use of new

technologies.

Success in the knowledge driven economies of the developed world have been

due to the quality of the human capital. Intellectual capital is the greatest strength of

nations that are making serious headway in this era. The new economy has created a

tremendous need for competent individuals. Infrastructure, connectivity, even access is

nothing without the right skills.

There is no alternative to developing high quality human capital. You cant

control or exploit what you dont know or understand. Ensuring quality human resource

development for all is the only guarantee that ICT will be pro people and will be of

benefit.

Its about having the ability to exploit ICTs. In Nigeria, in addition to addressing

the low level of e-business awareness, there is a need to encourage the massive

development and growth of education and training in c-business and ICT.

Unfortunately many, including policy makers, are not aware of the linkage

between ICT and productivity how ICT can make individuals and organizations more

productive. The knowledge society has created a tremendous need for educated,

competent and creative individuals but the often pressing and immediate needs of people

hide the true reality. The immediate needs of many in society are food on the table but

what about empowerment? Lack of education and understanding of e-business are in fact
the greatest barriers to be overcome if the country must participate meaningfully in the

knowledge economy and engage successfully in e-business.

2.7 APPLICATION OF DIRECT MARKETING IN ZENITH BANK

Zenith Bank is known for excellent customer services delivery. The awards they

have won over the year in this aspect of banking made this assertion true.

From the inception of the bank, their operational system represents a transition

from conventional way of doing business to a more technology- driven means which

involves solution to technology to maximize customer output. Their technological

strength lies in the following:

i. All their branches are online real-time.

ii. Excellent back up emergency plans

iii. All products are developed in-house

iv. Availability of in-house support for all applications

v. Exceptionally trained IT personnel.

An array of specially trained marketers, computer programmers, engineers and

database administrators who design and build the most multifaceted but user friendly

solutions to reach out to their customers business and relationship needs. These

applications include.

A. Direct Mail

This is one the direct marketing techniques employed by Zenith bank in carrying

out banking transaction with their customers.

 Direct mail is described as sending information about a special offer, product or

sale announcement, service reminder or other type of communication to a person at a

particular street of electronic address. They send mail shots to potential customers

encouraging them to open accounts to them and some shots to existing customers

encouraging them to apply for credit cards and subscribe to their new applications. This

application enables the marketer to identify the characteristics of prospects and customers

who are most able, willing and ready to do business with them.

B. Tele Marketing

This is a system whereby the marketers contact people on a qualified list to

market a product over the phone. They have effective script and contact structure that

enables the marketers seal good business deal with their customers. Most of these

esteemed customers can call for their real time account balance or even issue order for

draft and other transactions through telephone. Through phone, the marketers can attract

new customers, maintain the existing ones and to ascertain customer satisfaction level.

Telemarketing by Kotler and Keller (2006: 611) is defined as the use of the

telephone and call centres to attract prospect, sell to existing customers and provide

service by taking orders and answering questions. It is a major direct marketing tool. The

effectiveness of telemarketing depends on choosing the right telemarketers, training them

well and providing performance incentives.

Business to consumer telemarketing takes, place in two different ways viz: in-

bound telemarketing which occurs when a customer responds to direct mail or a

television advertisement; the second one is the out-bound telemarketing which is the

practice of placing calls to consumers for sales purpose.

 Clarke (1998:1) mentioned that in-bound telemarketing, particularly using

interactive voice response (IVR) is essentially a marketers answering machine that

provides automated mechanism for simple transactions.

Curtis, (1998:35) said that customer case and service line enables the organization

to build a database on enquirers, their concerns and profiles and even buying pattern.

Telemarketers should have pleasant voices and project enthusiasm.

C. Face to Face Selling Technique

This method is frequently used by Zenith Bank Marketer to provide tailor-made

solutions to their customers. This system helps them to identify the characteristics of the

prospects and customers who are most able, willing and ready to strike a business deal

with the bank.

2.8 APPLICATION OF ONLINE MARKETING IN ZENITH BANK

Zenith bank explores many technological innovations to ensure that their

customer transact, their banking business with ease. They have some facilities designed

to ensure round the clock availability of system and services. They have enormous range

of online product in their portfolio which enables their customers to transact business

with other customers of the bank, customers of other bank and even consummate

international business in the confines of their home or office. These products include:

1. Internet Banking

This is a real time solution that allows Zenith Bank customers access their

accounts 24 hours a day, 7 day a week. They may check account balances, view their

account statements and transaction history for various accounts.

 This online technique enables customers to view and track status of trade finance

transaction like letter of credit payments confirmation and establishments, form M and

bills of collection. Through this, they can also make buck payments to employees,

contractors and suppliers without running the risk of carrying cash or cheques. This is

very easy to use. All the customer need is a personal computer that is connected to the

internet with any browser of choice and log on to Zenith Bank Internet Banking website

and they are banking online already.

2. Automated Teller Machine (ATM)

This machine is used to decongest banking halls and provide alternative avenues

of cash for customers outside banking hours. Customers enjoy some quality Services on

ATM ranging from Access to account Information, Checking Minimum balance, Cash

withdrawals, Air- time vending and bile payments. This is an online product with global

relevance. Travellers can actually access their cash in any country with their Eazy-debit

card. Every Smart Card pay cardholder can access their fund on ATM. It has the

capability of converting foreign denominated card to local currency of the domiciled

country of the ATM. It impacts positively on the economy and serves as a means of

income generation to the bank.

3. Corporate I-Bank

This is one the most recent online innovative tool introduced in Zenith Bank. This

online solution allows authorized personnel to securely initiate and approve payments to

another party. With this, suppliers and employees can be paid without manual writing of

cheques, mailing payments or paying bills in person. It comes with complete backup
solution that ensures smooth audit trail. This solution has some unique features which

follow thus:

(a) Online Dutch Auction System Bids

This is a feature that a corporate body can use to source FOREX from CBN

irrespective of their location. The customer has the opportunity of keying in the specific

details required without having to be at the bank physically. The online DAS bid module

also reports the status of the bid submitted by the corporate for monitoring/tracking

purposes.

(b) Payments via Online Electronic System

It is a secure online electronic system which transfers authorized payment

instruction form (company names corporate account) into stipulated account (s).

Accounts to be credited can be local or international.

(c) Direct Debit

This is a situation where can credit and debit within and outside zenith bank.

Zenith Corporate I-bank will empower (company name) to debit their clients account

with amount due for service rendered. This direct debit feature is ideal for key

distributor/dealership schemes, utility bile payments, etc.

(d) Multibank Activity Report

Corporate customers with Zenith Bank who receive daily swift statements from

any of their banks can view all balances in those accounts form one single view through

corporate i-bank.

The above mentioned and many other online tools are zenith online marketing

tools which gives them edge over other banks.

2.9 STRENGTH OF DIRECT MARKETING

Direct marketing has been growing so fast because it provides increased benefits

in todays business world of intensifying competition. It enables companies to achieve

the following.

(i) Buy mailing list containing the names and contact information of almost any

group of target customers; for example, left handed people, millionaires, new

consulting companies.

(ii) Personalize and customize the messages they deliver to target customers.

(iii) Time the delivery of messages so that they reach prospects at the right

moment.

(iv) Achieve higher readership of printed materials.

(v) Conceal their offerings and strategies from competitors.

(vi) Measure customers responses to identify the most profitable campaigns.

(vii) Reach customers less expensively than through a sales force.

Direct marketings most important benefit for companies is that it lets firms

engage in relationship marketing which helps them build stronger and more profitable

bonds with target customers.

2.9.1 Weaknesses of Direct Marketing

Direct Marketing clearly offers crucial benefits to both companies and their

customers but it also has its weaknesses. Some of the attributes of direct marketing that

serve to turn customers away from any companys product are:

 (a) Customer Irritation: Many consumers view direct-marketing solicitations as

annoying.

(b) Unfairness: Some unscrupulous direct marketers take advantage of impulsive

buyers; for instance, by using inflated claims to capture customers with low

sales resistance.

(c) Outright Deception and Fraud: These include false claims about products

and performance and questionable gimmicks such as envelops that resemble

government documents which makes recipient feel compelled to open and

read the contents.

(d) Invasion of Privacy: Critics worry that marketers know too much about

customers lives and may use this knowledge to take advantage.

The above mentioned weakness needs to be worked on else it will

ultimately turn customers away from direct marketing.

2.10 THE STRENGTH OF ONLINE MARKETING

Electronic communication of all sorts has shown explosive growth, with internet

traffic doubling every passing day. Millions of websites are already opened for business

and more are coming online everyday. This shows that online marketing is very useful.

Some of the unique characteristics of online marketing are:

i) It triggers instantaneous and decentralized global communication.

ii) You can do banking or consummate other businesses at your own

convenient time.
 iii) It offers state-of-the art encryption to deliver privacy and security of

information.

iv) It gives you opportunity for greater outreach.

v) It provides a continuously expanding market.

2.10.1 Weaknesses of Online Marketing

Online marketing is very useful but it also has some weaknesses. There are some

potential risks associated with unencrypted electronic mail sent through this medium.

Some of the risks inherent in the use of online marketing are as follows:

i) It is not cost effective.

ii) Finding the target market can be difficult.

iii) It is difficult to obtain the desired clarity about the feature and usage of

products that were advertised online.

iv) It is easy to defraud the public through this medium.

v) Competitors through this will have access to information which ordinarily the

firm will not want to divulge.

2.11 COMPARISON OF DIRECT AND ONLINE MARKETING

Direct and Online marketing are both useful marketing strategies with a number

of similarities:

(a) Measurable: Their benefits are qualitative and quantifiable. Online marketing

can be measured through the number of subscribers, comments and in-bound

 links as well as the response rate while direct marketing can be measured

through the rate of patronage, product referrals and return on investment.

(b) Targeted: Just like the most strategically designed direct marketing

campaigns, most online marketing plans are geared towards an audience of

constituents and like-minded people who are most likely to do business with

the sponsor. In online marketing, the sponsor need to know who they are

writing for, the topic and the language; this key helps them to step back and

evaluate whether there are enough prospective readers in their chosen niche.

Direct marketing can only succeed if the firm have a defined market. They

need to know the taste and choice of their target audience, this will enable

them come up with product or service that will satisfy their need.

(c) Offer Oriented: Both strategies primarily tends to listen, shorts and converse

with customers to arouse their interest towards the purchase of their product.

The offer is not the real product or the service itself rather it is the ability to

grab the attention of their audience. Instant return on investment is not

expected until a certain degree of authority is established and once you earn a

good reputation, it helps the sponsor to sell their product and services.

(d) Inspirational: Direct and online marketing employs AIDA theory in their

campaign. Product messages amounts to nothing if it does not capture the

attention of the audience hold their interest; create a desire and finally taking

action by paying for the products or patronizing their services. Direct

marketing has a way of motivating the potential customers by emphasizing on

the unique selling point of their products. On the other hand, online marketing
 has a way of inspiring their readers to act on their feelings through support,

loyalty, investment of time and money.

(e) Experimental: One of the tenets of direct marketing is the testing of one

approach against another, the experimentation with offers and concepts in

order to identify those elements of your campaign that resonates with your

audience. And once you have found your sweet pot, of course, you dont

hesitate to take advantage of it until something better comes along. The same

goes to online marketing, one has to alternate between long and short posts

and see the one that is more popular. You can include a variety of outbound

link in your posts and watch which ones are clicked through more than the

others. You can share news and information about yourself, your organization

and your field of expertise and at the end of the day, you will settle on the

approach your readers like best.

Generally speaking both strategies share common goal which is provision of

product and services that will yield profit to the firm and provide customer satisfaction.

2.12 SUMMARY OF REVIWED LITERATURE

Direct marketing is an interactive marketing system that uses one or more

advertising media to affect a measurable response at any location. It involves

communication by a marketer to a prospect without an intermediary via any medium that

supports some degree of interaction. The concept has largely merged with the idea of

database marketing, which involves the establishment and maintenance of quantities of

data about prospects and customers which is explained in order to enhance the probability
of making a sale to each of them. Online marketing offers convenience to buyers and

lower costs to sellers. Marketing on the internet seems to be more customers driven, more

information based and more personal. In online marketing, the consumers not the

marketers give permission and controls over interaction. Online marketing aids the

marketers to adjust quickly to market condition, cut cost, Increase their audience size and

build relationship. Online marketing can be achieved through electronic storefronts,

placing ads on-line, participating in forms, newsgroups, bulletin boards and web

communities.

Direct and online marketers use a wide variety of channels to reach prospects and

customers. Participating companies can use these strategies an instrument to rate their

performance in relation to the best practices of high performing product or service.

Management can place a check on each strategy as to its perception of where service

delivery stands. The resulting profile exposes the strategies weakness and strength,

highlighting where they might move to become a truly outstanding player in the market

place.
 REFERENCES

Business Software Alliance (2001) E-commerce and Developing Markets: Technology,

Trade and Opportunity.

Bonnett, Kendra, (2000). An IBM Guide to Doing Business on the Internet U.S.A:

McGraw-Hill.

Business Software Alliance (2001) E-Commerce and Developing Markets: Technology,

Trade and Opportunity.

Bonnett, Kendra, (2000). An IBM Guide to Doing business on the Internet U.S.A

McGraw Hill.

Cronin, Mary J. (2000). Unchained Value: The New Logic of Digital Business U.S.A:

Harvard business School Press.

Cronin, Mary J., ed. (1998). Banking and Finance on the Internet. U.S.A.: John Wiley

& Sons.

Coward, Chris. August(2002). Obstacles to Developing an Offshore IT- Enabled

Services Industry in Asia: The View from the US. A Report prepared for the

Center for internet Studies, University of Washington.

E-commerce/Internet: B2B: 2B or Not 2B/Version 1.1, Goldman Sachs investment

Research (November 1999 and September 14, 1999 issues).

Evans, Philip and Thomas S. Wurster. (2000). Blown to Bits: How the New Economics of

Information Transforms Strategy U.S.A.: Harvard Business School Press.

Japan External Trade Organization. February 2002. Electronic Commerce in APEC

Economies: Focusing on Electric/Electronic Parts Procurements.

Kalakota, Ravi and Andrew B. Whinston. 1997. Electronic Commerce: A Managers

Guide. Addison Wesley Longman, Inc.

Kanter, Rosabeth Moss. 2001 e-Volve: Succeeding in the Digital Culture of Tomorrow

U.S.A.: Harvard Business School Press.

Lallana, Emmanuel C, Patricia J. Pascual, Zorayda Ruth B. Andam (2002) SMEs and e-

Commerce in Three Philippine Cities. A study/report prepared for the Asia

Foundation by Digital Philippines.

Lallana, Emmanuel, Rudy S. Quimbo and Zorayda Ruth B. Andam (2000) E-Primer: An

Introduction to E-commerce, DAI-AGILE, a USAID-funded project.

Lamont, Douglas. 2001. Conquering the Wireless World: The Age of m-Commerce

United Kingdom: Capstone Publishing Inc.

Mann, Catherine with Sue E. Eckert and Sarah Cleeland Knight. 2000. Global

Electronic Commerce: A Policy Primer. Washington DC: Institute for International

Economics.

Nwosu I.E, Nkamnbe (2006). Triple P advertising Aba, Afri- towers Ltd.

Plant, Robert. (2000). eCommerce Formulation of Strategy U.S.A.: Prentice Hall Inc.

Philip Kotler (2001). Marketing Management 10th ed, London Prentice Hall Inc.

Philip Kotler (2006). Marketing Management 12th ed, London Prentice Hall Inc.

Roger Clark (1998). Direct Marketing and Privacy, Canberra, Xamax Consultancy

Ltd.

OTHER INFORMATION SOURCES

www.marketingpower.com

www.commerce.net

www.zenithbank.com
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

Research design according to Strauss and Corbin (1990:87) is the specification of

procedures for collecting and analyzing the data necessary to help solve the problem at

hand such that the difference between the costs of obtaining various levels of information

associated with accuracy is maximized.

The research design requires the specification of procedures. These procedures

include decision on what information to generate, the data collection method, the objects

to be measured and the way in which the data are to be measured and the way in which

the data are to be analyzed. It must also ensure that the required data are collected

accurately and economically.

The exploratory research method is used for the purpose of the study. It is

concerned with identifying real nature of problems and formulating relevant hypothesis

to be tested. This research design was chosen because of its merits which includes.

a. It gives summary of the main issue.

b. Sources of information could be gathered through literature search, i.e

Secondary data comprising works of various experts on the subject.

c. It is possible to use experience survey, i.e meeting knowledgeable employee

of various level in the selected banks.

 3.2 SOURCES OF DATA COLLECTION

The two main sources used in this study to collect data are:

(a) Primary data: the primary data include the data collected from the questionnaire

administered by the researcher. The primary data also include information collected from

direct survey, which involves direct contact with the respondents. In this study, the

researcher used questionnaire as the main tool for the primary data collection. The

researcher distributed the questionnaire to potential respondents who filled and returned

them.

(b) Secondary data: these are data collected from publications and articles on works

of other researchers and writers, which are closely related to the study.

3.3 INSTRUMENT FOR DATA COLLECTION

The researcher used questionnaires for data collection. The questionnaire was

designed for the respondent in the area of study.

The questionnaire helped the researcher to obtain information from the respondents about

their opinions, attitudes, and satisfaction of the subject under study.

However, the questionnaire helped the researcher in the following ways.

1) it permitted more considerable answers

2) It was less expensive compared to the wide area it covered.

3) It was more adequate in situation in which the respondents have to check their

information.

4) It ensured that the structure is used to observe the respondents.

3.4 POPULATION OF THE STUDY

The population of the study is made up of 2401 staff and customers of the selected

organisation.

3.1 The staff and customer strength of the selected organisation

BANK BRANCHES CUSTOMER STAFF TOTAL

New heaven 532 75 607

Ogui 678 86 764

Uwani 368 62 430

Emene 283 57 340

Abakpa 217 43 260

TOTAL 2,078 323 2401

Source: Field Survey 2010

3.5 SAMPLING PROCEDURE

This work intends to cover every relevant department by applying simple random

sampling which will give every unit and element in the population equal chance of being

selected.
3.6DETERMINATION OF THE SAMPLE SIZE

The sampling technique was used to determine the sample size; the researcher applied the

Taro Yamane model of sample size determination.

n = N
1+ N(e)2

n = 2401
1+ 2401 (0.05)2

= 2401 = 2401
1+2401 x 0.0025 1+ 6.0025

= 2401 = 342.8 343

7. 0025

By percentage representation we have

New heaven branch customer 532 x 100 = 22%

2401

Ogui branch customer 678 x 100 = 28%

2401

Uwani branch customer 368 x 100 = 15%

2401

Emene branch customer 283 x 100 = 12%

2401

Abakpa branch customer 217 x 100 = 9%

2401
New heaven branch staff 75 x 100 = 3%
2401

Ogui branch Staff 86 x 100 = 4%

2401

Uwani branch Staff 62 x 100 = 3%

2401

Emene branch staff 57 x 100 = 2%

2401

Abakpa branch staff 43 x 100 = 2%

2401

Determination of specific number of questionnaire

New heaven branch customer 22 x 343 = 75%

100

Ogui branch customer 28 x 343 = 96%

100

Uwani branch customer 15 x 343 = 52

100

Emene branch customer 12 x 343 = 41%

100

Abakpa branch customer 9x343 = 31%

100
New heaven branch staff 3 x 343 = 10%
100

Ogui branch Staff 4 x343 = 14%

100

Uwani branch Staff 3 x 343 = 10%

100

Emene branch staff 2 x 343 = 7%

100

Abakpa branch staff 2 x 343 = 7%

100

3.8 METHOD OF DATA ANALYSIS

The data collected were analyzed with percentages and chi-square. The percentages were

used to analyze the data collected so as to make them more understandable to the readers

while chi-square was used to test the hypothesis based on its scientific nature. The

formula for the chi-square used in this study is as follows;

X2 = (O- E)2
E

Where X2 = computed chi- square

O = observed frequencies

E = expected frequencies

= summation
 REFERENCES

Eisenhardt K.M (1989) Building Theories from Case Study research. New York Time

Publishing.

Ikeagwu, E. K. (1998) Ground work of Research Methods and Procedures. Enugu

Institute for Development Studies.

Olakunori. O. (2000) Successful Research. Theory and Practice (Rev Ed) Enugu:

Computer Edge Publisher.

Strauss A and Corbin S. (1990) Basic Qualitative Research California. SAGE.

 CHAPTER FOUR

DATA PRESANTATION AND ANALISYIS

4.1 INTRODUCTION

The following analysis is based on the data obtained from responses to the questionnaire

administered. The question was structured in purposed form which reflects the objectives

of the study.

Table 4.1 Questionnaire Administration

RESPONDENTS ADMINISTERED RETURNED NOT RETURNED % RETURNED

Bank staff 48 48 - 16

Bank customers 295 256 39 84

Total 343 304 39 100

Source: Field survey 2010

Table 4.1 above shows taht343 questionnaires were distributed to the staff and

customers of zenith bank and 304 questionnaires were completed and returned.
Table 4.2 Different Account Operated by Customers
OPTIONS FREQUENCY PERCENTAGE

Savings 111 37

Current 108 35

Time deposit 85 28

Total 304 100

Source: Field Survey 2010

Table 4.2 shows that 37% of the respondents operate savings account, 35% operate

current account while 28% operate time deposit.

Table 4.3 Zenith Bank Products and Services Offer

OPTIONS FREQUENCY PERCENTAGE

Website 124 41

A bank staff 106 35

Other means 74 24

TOTAL 304 100

Source: Field Survey 2010

Table 4.3 shows that 41% of the customers know about the products and services

offer through the website, 35% through a bank staff while 24% through other means.
Table 4.4 Zenith Bank Product online Accessibility
OPTIONS FREQUENCY PERCENTAGE

Internet banking 100 33

Tele banking 96 31

Account activity report 84 28

Others 24 8

Total 304 100

Source: Field Survey 2010

Table 4.4 shows that 33% of the customers access the banks product through

internet banking, 31% Tele banking, 28% account activity report while 8% access it

through other means.

Table 4.5 Zenith Banks Strengths in marketing their ICT products and services
OPTIONS FREQUENCY PERCENTAGE

Efficient 209 69

Not efficient 95 31

TOTAL 304 100

Source: Field survey 2010

Table 4.5 shows that 69% of the respondents are of the opinion that Zenith bank

ICT is efficient while 31% say that Zenith bank ICT is not efficient

Table 4.6 Zenith Bank Staff Behaviour

OPTIONS FREQUENCY PERCENTAGE

Friendly 260 86

Unfriendly 44 14

TOTAL 304 100

Source: Field Survey 2010.

Table 4.6 shows that 86% of the customers are of the opinion that Zenith bank

staff is friendly while 14% of the customers are of the opinion of the staff are unfriendly.
Table 4.7 Services Rendered by Zenith Banks
OPTIONS FREQUENCY PERCENTAGE

Good 124 41

Poor 106 35

Cant say 74 24

TOTAL 304 100

Source: Field Survey 2010

Table 4.7 shows that 41% of the respondents are of the opinion that services

rendered by Zenith bank is Good, 35% say they are poor while 24% Cant say.

Table 4.8 Difficulties in Accessing online Services

OPTIONS FREQUENCY PERCENTAGE

Yes 215 71

No 89 29

TOTAL 304 100

Source: Field Survey 2010

Table4.8 shows that 71% of the Zeniths Services are easily accessed while 29%

are of the opinion that the services are not easily accessed.
Table 4.9 ATM Defrauds Customers
OPTIONS FREQUENCY PERCENTAGE

Yes 304 100

No 0 0

TOTAL 304 100

Source: Field Survey 2010

Table 4.9 shows that all the respondents agrees that ATM defrauds customers.

Table 4.10 Responsiveness to Desired Banking Needs

OPTIONS FREQUENCY PERCENTAGE

Yes 215 71

No 89 29

TOTAL 304 100

Source: Field Survey 2010

Table 4.10 shows that 91% of the respondents agree that the bank responds to

desired needs while 9% do not agree that the bank responds to desired needs.
 Table 4.11 Analysis of Questionnaire for Staff Category
OPTIONS FREQUENCY PERCENTAGE

Managerial 74 24

Supervisory 120 39

Junior 110 36

TOTAL 304 100

Source: Field Survey 2010

Table 4.11 shows that 24% of the respondents occupy managerial positions, 39%

are supervisors while 36% are junior staffs.

Table 4.12 Engagement in Direct and on line Marketing

OPTIONS FREQUENCY PERCENTAGE

Yes 187 62

No 117 38

TOTAL 304 100

Source: Field Survey 2010

Table 4.12 above shows that 62% of the respondents engage in direct and online

marketing while 36% do not.

 Table 4.13 Direct Marketing Creates positive Impact on Customer Retention
OPTIONS FREQUENCY PERCENTAGE

Yes 204 67

No 100 33

TOTAL 304 100

Source: Field Survey 2010

Table 4.13 shows that 67% of the respondents agree that direct marketing creates

positive impact on customer retention while 33% did not agree.

Table 4.14 Perceived Benefits of online Marketing

OPTIONS FREQUENCY PERCENTAGE

Speedy Customer Services 25 8

Time effective 75 25

Customer operational efficiency 64 21

Increased customer data base 40 13

All of the above 100 33

Total 304 100

Source: Field Survey 2010

Table 4.14 shows that 8% of the respondents say that online marketing ensures

speedy customer services, 25% says its time effective, 21% says it enhances operational

efficiency, 13% says it ensures increased customer data base while 33% says that all the

above options are benefits of online marketing.

 Table 4.15 Benefits of Direct Marketing
OPTIONS FREQUENCY PERCENTAGE

Reduction in operations cost 51 17

Improved customer relationship 55 18

Facility Customer Service Delivery 23 8

Instant feedback of product performance 50 16

All of the above 125 41

Total 304 100

Source: Field Survey 2010

Table 4.15 above shows that 17% of the respondents agree that direct marketing

reduces operational cost, 18% says it ensures improved customer relationship, 8% says it

is facility customer service delivery, 16% says it gives instant feedback of product

performance while 41% says all the above are benefits of direct marketing.

Table 4.16 Challenges of online Marketing

OPTIONS FREQUENCY PERCENTAGE

Lack of Infrastructure 105 35

High cost of IT procurement 124 41

Lack of Skilled man-power 75 24

Others - -

Total 304 100

Source: Field Survey 2010

 The table above shows that 35% of the respondents say that lack of infrastructure

is a challenge to online marketing, 41% say it is High costs of IT procurement, 24% say

is lack of skilled man-power.

4.2 TESTING OF HYPOTHESIS

Here the hypothesis formulated in chapter one of this research will be tested. The

five raised hypothesis will be tested one after the other.

Decision Rule

Reject the null hypothesis if the computed value of test statistics X2 exceeds the

critical tabulated value of X2 for (r-1) (C-1) degree of freedom.

HYPOTHESIS I

Ho: It is not necessary to apply direct and online marketing in communicating banks

products and services.

Hi: It is necessary to apply direct and online marketing in communicating banks

products and services

Table 4.17 Condensed outcome of two questions for testing hypothesis 1
OPTIONS TABLE 4.3 TABLE 4.4 TOTAL

Internet banking 124 100 224

Tele banking 106 96 202

Account activity - 84 84

Others 74 24 98

TOTAL 304 304 608

Source: Adapted from tables 4.3 and 4.4

Table 4.18 Contingency table of X2 for Hypothesis I

O E O-E (O-E)2 (O-E)2
E
224 152 72 5184 34.10

202 152 50 2500 16.44

84 152 68 4624 30.42

98 152 54 2916 19.18

100.14

Source: Field survey 2010

Critical value = (r-1 (c- 1)

= (2-1) (4-1)

= (1) (3)

= 3 degree of freedom

The critical value of X2 0.05 = 7.81 from chi-square table at 3 degree of freedom.
Decision

Since the calculated X2 value of 100.14 is greater than the critical value which is

7.81, we reject the null hypothesis Ho and accept the alternate hypothesis Hi which states

that it is necessary to apply direct and online marketing in communicating banks products

and services.

Hypothesis II

Ho: Zenith Bank does not benefit from application of direct and online marketing

Hi: Zenith Bank benefits from application of direct and online marketing.

Table 4.19 Condensed outcome of two questions for testing hypothesis II

OPTIONS TABLE 4.12 TABLE 4.13 TOTAL

Yes 187 204 391

No 117 100 217

TOTAL 304 304 608

Source: Adapted from tables 4.12 and 4.13

Table 4.20 Contingency table of X2 for Hypothesis II
O E O-E (O-E)2 (O-E)2
E
391 304 15 225 0.74

217 304 87 7569 24.89

25.63

Source: Field survey 2010

Critical value = (r-1 (c- 1)

= (2-1) (2-1)

= (1) (1)

= 1 degree of freedom

The critical value of X2 0.05 = 3.84 from chi-square table at 1 degree of freedom.

Decision

Since the calculated X2 value of 25.63 is greater than the critical value which is

3.84, we reject the null hypothesis Ho and accept the alternate hypothesis Hi which states

Zenith Bank benefits from application of direct and online marketing.

Hypothesis III

Ho: The application and usage of direct and online marketing by Zenith bank is not

deceptive or fraudulent to their customers

Hi: The application and usage of direct and online marketing by Zenith Bank is not

deceptive or fraudulent to their customers.

Table 4.21 Condensed outcome of two questions for testing hypothesis III
OPTIONS TABLE 4.9 TABLE 4.10 TOTAL

Yes 304 276 580

No - 28 28

TOTAL 304 304 608

Source: Adapted from tables 4.9 and 4.10

Table 4.22 Contingency table of X2 for Hypothesis III

O E O-E (O-E)2 (O-E)2
E
580 304 276 76176 250.57

28 304 276 26176 250.57

501.14

Source: Field survey 2010

Critical value = (r-1 (c- 1)

= (2-1) (2-1)

= (1) (1)

= 1 degree of freedom

The critical value of X2 0.05 = 3.84 for chi-square table at 1 degree of freedom.
Decision

Since the calculated X2 value of 501.14 is greater than the critical value which is

3.84, we reject the null hypothesis Ho and accept the alternate hypothesis Hi which states

that the application and usage of direct and online marketing by Zenith Bank is deceptive

and fraudulent to their customers.

Hypothesis IV

Ho: Channel of Communication does not impaction the profitability level of the bank

Hi: Channel of Communication Impacts on the Profitability level of the bank

Table 4.23 Condensed outcome of two questions for testing hypothesis IV

OPTIONS TABLE 4.5 TABLE 4.6 TOTAL

Yes 209 260 469

No 95 44 139

TOTAL 304 304 608

Source: Adapted from tables 4.5 and 4.6

Table 4.24 Contingency table of X2 for Hypothesis IV
O E O-E (O-E)2 (O-E)2
E
469 304 165 27225 469

139 304 165 27225 89.55

179.10

Source: Field survey 2010

Critical value = (r-1 (c- 1)

= (2-1) (2-1)

= (1) (1)

= 1 degree of freedom

The critical value of X2 0.05 = 3.84 from chi-square table at 1 degree of freedom.

Decision

Since the calculated X2 value of 179.10 is greater than the critical value which is

3.84, we reject the null hypothesis Ho and accept the alternate hypothesis Hi which states

that channel of communication impacts on the profitability level of the bank.

 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 SUMMARY OF FINDINGS

The following findings were made in analyzing the data:

The study relieved that it is necessary to apply direct and online marketing in

communication helps market banks products and services

The study shows that Zenith Bank benefits from application of direct and online

marketing which indicates that zenith bank plc have added advantage in applying

direct and online marketing.

Direct and online marketing is deceptive and fraudulent to zenith bank customers.

The study indicates that channel of communication impacts on the profitability

level of the bank which implies that effective communication channel increases

the banks return on investment and productivity.

5.2 CONCLUSION

The study concludes that direct and online marketing it a major index used by

banks in increasing their return on investment and productivity level. Also the study

moved further to agree that most banks use direct and online marketing to defraud and

hood wink customers.

5.3 RECOMMENDATION

Based on the findings of this research work, the researcher recommends that

1. Banks should review their online marketing communication strategies form time

to time for effective marketing of their products and services.

2. Banks should ensure they use business to overcome the challenges in the business

environment like long queuing system, lack of parking lot.

3. Banks should use online and direct marketing to reach out to their customers and

improve their customer relationship.

4. Banks should use online and direct marketing to increase their market share by

introducing special offers that will arouse the interest of their customers.

5. Banks should periodically organize seminars and symposia for their customers on

the need to safeguard their pin code and so give them quality services on ATM

ranging from Access to account Information, checking minimum balance, cash

withdrawals, Air time vending and bill payment.

QUESTIONNAIRE

ZENITH BANK CUSTOMERS

1. Which account do you operate?

(i) Savings [ ]

(ii) Current [ ]

(iii) Time Deposit [ ]

2. How do you known about the product and service offer of Zenith Bank?

(i) Through their Website [ ]

(ii) Introduced to me by a bank staff [ ]

(iii) Others Specify ..

3. What products of Zenith Bank can you access online?

(i) Internet Banking [ ]

(ii) Tele Banking [ ]

(iii) Account Activity Report [ ]

(iv) Others, Specify

4. How do you assess the ICT strength of Zenith Bank Plc in Marketing their

products and services

(i) Efficient [ ]

(ii) Not efficient [ ]

5. How do you view Zenith Bank staff?

(i) Customer friendly [ ]

(ii) Unfriendly [ ]
6. How will you rate the services rendered by Zenith Bank?

(i) Good [ ]

(ii) Poor [ ]

(iii) Cant say [ ]

7. Can you access their online products without difficulties?

(i) Yes [ ]

(ii) No [ ]

8. Do you receive prompt response on enquires you make online?

(i) Yes [ ]

(ii) No [ ]

9. Are they responsive to your desired banking needs?

(i) Yes [ ]

(ii) No [ ]

10. Zenith Bank E-business product include the following except

(i) Tele link [ ]

(ii) Value card [ ]

(iii) Internet Banking [ ]

(iv) Automated Direct Payment [ ]

(v) Alert [ ]

(vi) Zenith. Easy Card [ ]

(vii) ATM Banking Services [ ]

(viii) None of the above [ ]

 FOR STAFF

1. Which category do you belong?

(i) Managerial [ ]

(ii) Supervisory [ ]

(iii) Junior [ ]

2. Do your bank engage in direct and online marketing?

(i) Yes [ ]

(ii) No [ ]

3. If yes, does direct marketing create positive impact in customer retention?

(i) Yes [ ]

(ii) No [ ]

4. What are the perceived benefits of online marketing in Zenith bank Plc?

(i) Speedy Customer Service delivery [ ]

(ii) Time-effective [ ]

(iii) Enhanced Customer Operational Efficiency [ ]

(iv) Increased customer data-base [ ]

(v) All of the above [ ]

5. What are the benefits of direct marketing in Zenith bank Plc?

(i) Reduction in operational cost [ ]

 (ii) Improved customer relationship [ ]

(iii) Facility in customer service delivery [ ]

(iv) Instant feedback of product performance [ ]

(v) All of the above [ ]

6. What are the challenges in online marketing

(i) Lack of infrastructure [ ]

(ii) High cost of IT procurement and deployment [ ]

(iii) Lack of skilled man-power [ ]

(iv) Others, Specify

7. What Possible challenges are faced by Zenith Bank in the use of online

marketing?

(i) Irregular interface with customers [ ]

(ii) High cost of product innovation [ ]

(iii) High customer turnover [ ]

(iv) Others specify .