Marketing Promotional Efforts and Generating Positive Word-Of-Mouth in Colombo Divisional Secretariat Division


Scientific Essay, 2019
12 Pages

Excerpt

Table of Contents

1. INTRODUCTION

2. PROBLEM STATEMENT AND OBJECTIVES OF THE STUDY

3. LITERATURE REVIEW

4. METHOD

5. RESULTS
5.1. Bank Choice
5.2. Independent Variable and Its Dimensions
5.2.1. Levels of Independent Variable and Its Dimensions
5.3. Generating Positive Word-of-Mouth and Its Dimensions
5.3.1. Levels of Generating Positive Word-of-Mouth and Its dimensions
5.4. The Relationship between PE and GPWOM
5.5. Regression of Promotional Efforts (PE) on Generating Positive Word-of-Mouth (GPWOM)

6. CONCLUSION, RECOMMENDATION AND IMPLICATION

REFERENCES

Abstract: Banking industry as a part of service sector in all the world is now in a strong competitive situation. Using Positive Word of Mouth is one of the best tactic to accomplish competitive advantage and to sustain in the market. There is a requirement for generating positive word-of-mouth and an understanding the factors those are influencing on it. Therefore, this research is contributing to identify the main factor that is influencing on Generating Positive Word-Of-Mouth (GPWOM) in relation to banks selectively. To achieve the goal of this research, the data were collected from convenience sample of 200 banking customers in Colombo Divisional Secretariat Division. The respondents provided the data by means of a close-ended questionnaire. Pearson’s Correlation was used for testing the hypotheses. Data analysis was conducted using SPSS Software. The results of this research revealed that Promotional Efforts (PE) has positive significant relationship with GPWOM and PE has higher influence on GPWOM. This study provides outcomes that could be valuable to bank managers for strategic planning and to compete in the industry.

Keywords: Banking Industry, GPWOM and Promotional Efforts

1. INTRODUCTION

Word-of-mouth communication originates with human communication; it has become a dynamic part of many key marketing communication campaigns over the past years, due in part to the power inherent in such a social phenomenon. Hence, the word-of-mouth communication is an important feature in marketplace phenomenon too, by which customers obtain information relating to organization and their offerings (Laczniak, DeCarlo and Ramaswami, 2001). It is usually perceived as more essential for services than goods. Dhillon (2013) suggests that most of the service providers get their consumers through word-of-mouth communication referrals.

In Sri Lanka because of some changes in banking system for example emerging and developing private banks, competition in this industry is increasing day by day. In this kind of circumstances retaining existing consumers and attracting new customers need an effective administration in all aspects. Gremler, Gwinner and Brown (2001) recommend that one of the best tools for banks to be distinguished from other banks and reach profit maximization is using word-of-mouth. Further, Dhillon (2013) indicates that by its nature, this form of communication is outside the formal control of banks and yet its effect is such that the ability to influence or encourage word-of-mouth could be a powerful marketing tool.

Therefore, this study particularly in the Sri Lankan context empirically investigates the GPWOM; since banks have considerable faith in positive word-of-mouth communication as a means of fascinating new customers and a variety of customer choice of bank highlight the importance of personal recommendation, thus need to explore the main factor that has significant impact on GPWOM in Sri Lanka. Hence, this study specifically focuses on selected popular banks for testing the PE that influences on GPWOM in Colombo Divisional Secretariat (CDS) Division.

2. PROBLEM STATEMENT AND OBJECTIVES OF THE STUDY

There is a lack of literature in Sri Lanka to examine the relationship between Promotional Efforts (PE) and Generating Positive Word-Of-Mouth (GPWOM). Thus, there exists a clear empirical gap with respect to the influences of various factors on GPWOM within the context of banking industry. This empirical gap becomes a problem to banks to know whether their banking service is successful or not among the customers. Indeed, there is a need to evaluate to what extend the stimulus influenced on GPWOM in banking sector.

Therefore, the primary objective of this study is to examine the role of Promotional Efforts that is influencing on positive word-of-mouth among customers in the context of banking industry in CDS Division. Further, as the secondary objective, this study also focuses on identifying the level of PE and GPWOM in relation to popular banks selectively in CDS Division.

3. LITERATURE REVIEW

Word-of-Mouth Communication- The term word-of-mouth communication is used to define verbal communications either positive or negative between groups such as the product provider, independent experts, family, friends and actual or potential consumer (Laczniak, DeCarlo and Ramaswami, 2001).

Promotional Efforts- According to Kelly (1972), Promotion is the coordination of all seller initiated efforts to set up channel of information and persuasion to facilitate the sale or a product and service or the acceptance of an idea. It includes activities and processes designed to change or reinforce behavior and ideas of the consumers, through communication.

This study considers selective banks (Bank of Ceylon (BOC), Peoples Bank, Commercial Bank, Hatton National Bank (HNB), Seylan Bank and Sampth Bank) in CDS Division of Sri Lanka. Therefore, the specific research question of this study is:

“How far the role of Marketing Promotional Efforts influence on GPWOM of Popular Banking Services in Colombo Divisional Secretariat Division?”

As Wirtz and Chew (2002) indicate that Marketing Promotional Efforts have positive influenced on GPWOM, the Hypothesis 1 (H1) of this study is:

H1: Marketing Promotional Efforts is significantly influencing on GPWOM.

PE is concerned as its dimensions the combination of Incentives and Sales promotion, Personal and Non personal communications and Publicity and Public relations as indicated by Wirtz and Chew (2002).

GPWOM is made with Willingness (e.g., Anderson, 1998), Praise (e.g., Anderson, 1998), Intensity (e.g., Brown and Reingen, 1987), Content (e.g., Harrison-Walker, 2001) and Valance (e.g., Herr, Kardes and Kim, 1991). Hence, the GPWOM is evaluated through these measures as dimensions.

4. METHOD

Primary data are collected through structured questionnaires with closed statements measured with Likert’s scale (1-5 as strongly disagree, disagree, marginal, agree and strongly agree, respectively), based on six popular banks (namely BOC, Peoples Bank, Commercial Bank, HNB, Seylan Bank and Sampth Bank) in the CDS Division in Colombo District in Sri Lanka. In the CDS Division, there are 35 Grama Niladhari Divisions and the population is 318,048. Among 318,048 peoples in these 35 Niladhari Divisions, about two hundred (200) respondents who consume such popular banking services for their personal consumption have been identified using convenient sampling technique (see Table 1).

Table 1: Sampling Framework

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5. RESULTS

5.1. Bank Choice

There are several popular banks available in the banking sector. Within these banks, Bank of Ceylon, Peoples Bank, Commercial Bank, Hatton National Bank, Seylan Bank and Sampth Bank are selected for this research purpose. From 200 respondents 30.5% of user’s bank choice is HNB, 24% of user’s bank choice is BOC, 18% of user’s bank choice is Commercial Bank, 15.5% of user’s bank choice is Peoples Bank, 7% of user’s bank choice is Seylan Bank and 5% of user’s bank choice is Sampath Bank (see Table 2).

Table 2: Bank Choice Distribution

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(Source: Survey Data)

5.2. Independent Variable and Its Dimensions

5.2.1. Levels of Independent Variable and Its Dimensions

Table 3: Overall Measures of Independent Variable

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(Source: Survey Data)

PE is evaluated with three dimensions: Incentives and Sales promotion, Personal and Non-Personal communication and Public relations and Publicity as indicated by Lovelock and Wirtz (2004). PE as another independent variable has high level attribute of the customers (Mean X1 = 4.738 and see Table 3). In addition, most of the customers expressed generally a common opinion regarding the variable of PE (Standard deviation = 0.421). With individual analysis, it is also noted that about all customers in this study have high level attribute for the PE.

Specifically, all dimensions of PE have high level attributes in relation to their mean values (mean values of Incentives and Sales promotion X1.1 = 4.750, Personal and Non-Personal Communication X1.2 = 4.760 and Public relations and Publicity X1.3 = 4.705). Among these dimensions, personal and non-personal communication accounts high value of mean and public relations and publicity is comparatively lower than other dimensions in contribution to PE.

5.3. Generating Positive Word-of-Mouth and Its Dimensions

5.3.1. Levels of Generating Positive Word-of-Mouth and Its dimensions

The GPWOM is assessed with five dimensions: Willingness, Praise, Intensity, Content and Valance. The dependent variable GPWOM has high level attribute of the customers (Mean X2 = 4.470 and see Table 4). Notably, most of the customers expressed the common opinion regarding the variable of GPWOM (Standard deviation = 0.258). With individual analysis, it is also noted that all customers have high level attribute for GPWOM.

Indicatively, all dimensions of GPWOM have high level attributes of customers in relation to their mean values (mean values of Willingness X2.1 = 4.7650, Praise X2.2 = 4.7575, Intensity X2.3 = 4.5350, Content X2.4= 4.5350 and Valance X2.5= 4.1250). Among these dimensions, Willingness of GPWOM of popular banks have high value of mean; and Content is comparatively lower than other dimensions in contribution to GPWOM (see Table 4).

Table 4: Overall Measures of Dependent Variable

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(Source: Survey Data)

5.4. The Relationship between PE and GPWOM

The correlation analysis is initially carried out to explore the linear relationship of PE with GPWOM, if it exists. Results indicate that there is statistically linear significant and positive relationship (r = 0.891, p < 0.01) between PE and GPWOM (see Table 5). Thus, accept the Hypothesis 2 H2 – i.e., Marketing Promotional efforts significantly influence on GPWOM.

Table 5: Correlation between Promotional Efforts and GPWOM

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** Correlation is significant at the 0.01 level (2-tailed).

(Source: Survey Data)

It is also noted that from a social science point of view, the PE has a reasonable strong positive correlation. The association between the points of PE and GPWOM is also very closely observed and except a few combination of points, other points coordinate between the variables are very closely scattered (see Figure 1).

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Figure 1: Scatter plots between Promotional Efforts and GPWOM

(Source: Survey Data)

The individual correlation analysis between the variables PE and GPWOM for the banks of this study revealed that except Seylan Bank, other five banks (BOC, Peoples Bank, Commercial Bank, HNB and Sampth Bank) have significant correlation between PE and GPWOM, even at the 5% level (see Table 6). The insignificant relationship between the variable for Seylan Bank might be due to small number (N = 14) and weak the overall significant relationship (r = 0.891, p < 0.01) between PE and GPWOM.

Table 6: Correlation of Popular Banks between PE and GPWOM

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** Correlation is significant at the 0.01 level (2-tailed)

(Source: Survey Data)

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Details

Title
Marketing Promotional Efforts and Generating Positive Word-Of-Mouth in Colombo Divisional Secretariat Division
Author
Year
2019
Pages
12
Catalog Number
V460853
ISBN (eBook)
9783668921030
ISBN (Book)
9783668921047
Language
English
Tags
marketing, promotional, efforts, generating, positive, word-of-mouth, colombo, divisional, secretariat, division
Quote paper
Saraniya Devendra (Author), 2019, Marketing Promotional Efforts and Generating Positive Word-Of-Mouth in Colombo Divisional Secretariat Division, Munich, GRIN Verlag, https://www.grin.com/document/460853

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