CAPE COAST POLYTECHNIC

SCHOOL OF BUSINESS AND MANAGEMENT STUDIES DEPARTMENT OF MARKETING

MARKETING PLAN FOR MFANTSIMAN RURAL BANK A PAPER SUBMITTED IN PARTIAL FULFILMENT OF THE COURSE MARKETING OPERATIONS

PRESENTED TO: MR. ERASTUS EMMANUEL YAMOAH

PRESENTED BY: KOTOKO PETER DAVID 0209020179

MAY, 2011

TABLE OF CONTENT

Executive summary
Mfantsiman Rural bank is a rural bank located in the Central Region of Ghana precisely Cape Coast. The bank has six branches in the region which offer to customers the following services; Savings Account, Current Account, Fixed deposit, Money transfer, Loans etc. The bank aims at serving inhabitants of the rural areas of the region and people who are not been served by the commercial banks. The bank has in retention three hundred and fifty customers and is also the rural bank with most customers in the region. As result the bank holds the highest market share in the rural banking market as far as the central region is concerned. Competitors of the bank include Kakum Rural Bank, Nyankrom Rural bank, micro financial institutions, and the commercial banks (zenith bank, Ghana commercial bank, prudential bank, etc). The commercial banks are also extending their branches to the rural areas and offering the same or better services as the rural the banks; this has resulted in the bank losing more of its customers to the commercial banks. Aside been the highest shareholder in the rural banking industry, the bank is unable to make enough profit to account for the huge customer base. In view of this, the bank is introducing a new product into the market called student special account a type of current account for students in tertiary and second cycle institution. The holders of this account will only need GHS 10 as initial deposit and enjoy interest free overdraft and free gift or cash incentives and also make withdrawals anytime with a chaque book, also half price for other banking charges. Plans are also in place to install six Automated teller machines (ATM) at the various branches of the bank, to salvage the modern standard banking desire of customers In light of the circumstances, a plan has been prepared with a view to Retain existing customers Win new customers Increase customers from three hundred and fifty to five hundred by the end of the year Ensure the new product enjoys success. Increase profit by 30% within the next two years A careful look has been taken of both the external and internal environments. The external analysis looked at the macro-environment, the market and the competition, while the internal analysis examined the Banks performance, as well as its management and staff, infrastructure and delivery, and its customers. A SWOT analysis was then performed, to identify the, strengths, weaknesses, opportunities and threats. This analysis lends to the view that it is imperative that the bank changes its existing strategy and focus on other markets. It is not suggested that the bank should focus on people resident locally, including students, farmers, traders, managers, entrepreneurs and retired persons. We firmly believe that by pursuing this avenue, and by implementing and controlling the proposed fundamental marketing strategies and marketing mix strategies, we will be able to achieve the stated objectives.

1. Introduction
1.1 Background Mfantsiman Rural bank is a rural bank located in the Central Region of Ghana, precisely Cape Coast. The bank has in retention six branches in the metropolis of Cape Coast. The bank serves three hundred and forty five customers. The following products are offered by the bank: Savings Account Current Account Fixed deposit Money transfer Loan

The customers of the bank include students, workers (traders, farmers, teachers, etc). Currently, Mfantsiman Rural Bank has more customers than other rural banks in the metropolis. Its competitors include Kakumdo Rural, Nyankrom Rural Bank and the commercial banks (zenith banks, Prudential Bank, Barclays bank, Ghana Commercial bank, Agriculture Development Bank etc. The bank has made tremendous improvement in its customer base, but not enough profit to account for. Aside all these, the bank is facing problems in relation to serving customers. Most customers now want modern standard of banking such as internet banking and automated teller machine (ATM), which the bank is currently making plans to put in place.

The management of the bank has planned to launch a new product called Students special account. This is a current account mainly for students; the initial deposit for the account is GHS 10. The owners of such accounts will enjoy interest free overdraft and free gift or cash incentives for joining. The main target customers for this product are students in the tertiary and second cycle institutions.

1.2 Objectives

The purpose of this work is to steer the bank on a course that will enable it to secure more customers and become the best rural bank in Cape Coast and Ghana as a whole. At the same time position its products well in the minds of customers especially its new product (student special account). To attain this, the project will focus on the following objectives:

Retain existing customers Win new customers Increase customers from three hundred and fifty to five hundred by the end of the year Ensure the new product enjoys success. Increase profit by 30% within the next two years.

To accomplish these objectives, the project, after analyzing the external and internal environments of the Bank, identified the various marketing strategies designed to bring success. It then tabled the implementation and control mechanisms aimed at ensuring that the desired results are achieved.

2. Analysis of the Environment

An analysis was carried out on both the external and internal environments of the bank with a view to employing the strategies necessary to achieve our objectives.

2.1 External Analysis

The external analysis looked at the macro-environment, the market and the competition in order to identify our opportunities and threats.

2.1.1 Macro-environment

2.1.1.1 Demographic, Cultural & Social The population of Cape Coast (Central Region) currently stands at 1,723,823. The corresponding 2000 population was 1,593,823. This means that the regions population is growing at a rate of 2.1% per annum. The age structure of the region depicts a youthful population. The proportion of the population under 15 years is 36% and the proportion above 50 years is 11%.

The population until recent times was predominantly religious, however with the introduction of televisions, internet, etc in our homes there is a big swing to the Western culture and hence new lifestyles and tastes. As a result of the advocating of equal rights for women, we have seen that women are now taking on more leading roles in the society. The education system allows for equal opportunities for men and women, and it appears that the women are currently achieving better grades than men. Women currently make up 50 % of the workforce. The current regional minister is a woman. 5

2.1.1.2 Political

The Country is stable and conducive to investments.

The Government is comprised of a young vibrant team with exciting developmental plans for the country.

The country is part of ECOWAS (Economic Community of West African States) with other 15 countries in West Africa

The members of ECOWAS are all having a stable economy except Cote divore which experienced a political power problem recently.

. 2.1.1.3 Economic

GDP grows steadily at an average of 4.70% per annum.

Inflation is maintained at 10.90%

The Ghana cedis is not stable but currently pegged to the US dollar at 1.50

The financial sector is growing. Construction is on the rise. The main export products are cocoa, gold, manganese, and crude oil. 6

Tourism is growing and the hotel industry is developing. A 5% increase in tourist arrivals was recorded last year.

Crude oil was discovered in the country for commercial production.

2.1.1.4 Technological

Modern telecommunication systems are available, including fibre optic telecommunication and Internet.

ATMs are currently in operation at all the commercial banks. The commercial banks provide online service through a network of ATMs in the region. Year after year there is greater demand for ATM services by customers as they come to appreciate the convenience more and more. More than 2.5 million Ghanaians have access to the internet and computer.

2.1.1.5 Market

The market consist of Government, other public sector bodies, corporate entities, insurance companies, professionals, public servants, teachers, and Nationals resident in Cape Coast and its environs.

2.1.1.6 Competition

There are other rural banks located in the region examples include Kakumdo Rural Bank and Nyankrom Rural Bank. These banks are all given strong competition to Mfantsiman Rural Bank. 7

The commercial banks (Zenith Bank, Barclays Bank, Ghana Commercial Bank, Agriculture Development Bank, Prudential Bank) in the country have also extended their branches to the rural areas and are competing with the rural banks for customers. Most of the customers prefer to do business with the commercial banks due to prestige and good customer care, not forgetting modern standard of banking. There is also competition from other micro financial institutions such as First Allied, First national bank etc.

2.2 Internal Analysis

The internal analysis looked at our performance, our internal configuration and our customers in order to identify our strengths and weaknesses.

2.2.1 Performance

Mfantsiman Rural Bank is currently serving more than three hundred customers in the region, and has in retention six branches spread out in the Central Region. The bank has more customers than other rural banks in the region. The bank has 34% of assets, 38% of loans and 35% of deposits. Mfantsiman Rural Bank held 40% of deposits but it has since lost some of its deposits to its competitors.

2.2.2Management of Staff Mfantsiman Rural Bank is the only rural bank on the coast of Ghana with a local Board.

Most of the staff are young and have the requisite capabilities, and are re-trainable for newer systems and technology. All members of the staff are locals and have good contact with the community at large. 8

Mfantsiman Rural Bank is not as equipped as its commercial competitors with research departments and the qualified staff to keep their institutions in line with legal, technological, operational and other changes.

2.2.3 Infrastructure and Delivery

Mfantsiman Rural Bank is the largest bank on the island with six local branches

The bank also performs as a revenue point for most utility companies.

Mfantsiman Rural Bank also offers money transfer to other rural banks all over the country.

The bank also deals in international money transfer through western union money transfer.

The bank does not have branches in other parts of the country, but has networked up with other rural banks in the country.

2.2.4 Customers

The bank has a huge customer base of more than three hundred customers. The bank serve people in the local areas mainly farmers, small scale enterprise operators, students, low and middle income earners.

9 3. SWOT Analysis

The SWOT Analysis identified the opportunities, threats, strengths and weaknesses of the bank, as follows:

3.1 Opportunities

The Bank is very well placed with a good and assured customer base from the level of the government and the private sector business.

Many patriotic Nationals will do business with Mfantsiman Rural Bank because they know that the profits of the Bank belong to the people of the community and are used for the communitys development.

Latest improvement in the entrepreneurial base will encourage entrepreneurs in the local areas to do business with the bank.

The Governments emphasis on development of local farmers and their product will encourage them to take loan from the bank.

The presence of tertiary and second cycle institutions in the region will also benefit the bank. As many student are liable to be holders of the students special account. The population that is mostly young comprises a strong workforce capable of advancing the Governments developmental plans to take the countrys forward. The long queues at various commercial banks will trigger motives in the customers to move to rural banks where queues are not available

10 3.2 Threats

Customers tend to prefer the commercial banks due to prestige, modern standard of banking, ATM services and perceive customer orientation.

Most customers are discouraged form saving in the bank; because they are of the perception that rural banks liquidate easily as compared to commercial banks.

The introduction of western culture and lifestyles into our society could result in greater external spending and so have a negative impact on the local economy.

Customers in the local areas are mostly not interested in saving money, as result tends to have nothing to do with banks.

There is increased competition from the non-lank financial sector, the credit unions, the savings & loans bank, the building & loans association and the insurance companies. These institutions are not regulated by Central bank and hence they are not restricted in their operations. They have been paying very high rates on deposits and have also been offering more and more of the services which were traditionally offered by banks.

Lack of modern standard of banking is driving most customers away.

The inability of customers to cash huge amounts of money at the various branches, unless prior notice is given is also de-motivating customers from doing business with the bank.

11 3.3 Strength

The leading position in the region, with respect to market shares of assets, loans and deposits, puts the bank in a position to influence the level of interest rates.

Mfantsiman Rural Bank is the only rural bank with local Board of Directors, a Board that can attract good business to the Bank as it consists of successful & respected business people with a good mix of expertise in key industries and with strong social links in the country. Approval of loans is faster with a local Board in place.

Most of the staff are young and have the requisite capabilities, and are re-trainable for newer systems and technology. This will therefore make the selection and training of the sales team easy.

All the members of the staff are local and very well known and have good contact with all sectors of the community. They will therefore be in a good position to attract more customers to the Bank.

It may be an advantage for Mfantsiman Rural Bank to have the largest customer base in the local industry as customers may encourage others to use its services.

Fewer queues at the business centers are all factors that can bring more customers because they can get access to their money without stress.

12 3.4 Weaknesses

The lack of exposure for the staff as a result of poor customer mix makes it difficult for the staff to be as experienced and equipped as most of the competitors to deliver services efficiently and maintain high standards of service.

The commercial bank competitors are better prepared to stay afloat in the face of strong competition with research departments and qualified staff to keep their institutions in line with legal, technological, operational and other changes.

The inability of customers to cash large sums of money at the branches is a serious weakness.

The unavailability of ATM services and other modern standard of banking are also affecting the bank negatively.

4. Fundamental Marketing Strategies

4.1 Supply Strategies

Develop a new current account system called students special account. The owners of this account will enjoy interest free overdraft and free gift or cash incentives for joining. The main target customers for this product are students in the tertiary and second cycle institutions. 13 4.2 Demand Strategies

Target low and middle income earners, students and people over 50 years of age returning home or resident locally, including traders, farmers, managers, entrepreneurs and retired persons.

Achieve product differentiation and a competitive advantage in the market.

4.3 Positioning Strategies

Measuring from a scale of 1 to 6, where 6 is the best point, Mfantsiman Rural bank is currently perceived to hold the first position of 6 for service offering and also the second position at 4 for service quality (see Figure I). The Banks aim is to also move to the top position for service offering and service quality through its innovative product development and improved service quality (see offering II). Service offering Service Figure 6 6 Figure I Figure II
o CIBC Bank Positioning
o SBL
o CIBC o SBL Bank Position After Repositioning

o CBC
2

o Scotia
6
Service Quality

o CBC
1

o Scotia
6
Service Quality

o
Barclays

o
Barclays

14 4.4 Competition Strategies

Improve service quality by training staff.

Make ATMs available and telephone banking services that will provide greater convenience.

Offer innovative wealth-management products that will attract the target group.

Increase the bank reserve ratio

Improve on the publicity rate

Educate target group on the advantages of saving in a rural bank.

5. Marketing Mix Strategies

5.1 Product

Mfantsiman Rural bank will offer a special product called students special account. An account with the aim of providing students with a reason to do business with Mfantsiman Rural Bank. The owners of such accounts will enjoy interest free overdraft and free gift or cash incentives for joining and half price for other bank charges. The main target customers for this product are students in the tertiary and second cycle institutions located in the region.

15 5.2 Price

The special student account is interest free.

Initial deposit for the account is GHS 10

Charges for other services will be half the price

5.3 Place

Special counter will be made available to student special account holders for them to do their transactions without having to wait in the regular line.

Provide the service through our network of branches throughout the country.

Plans are in place to establish ATMs at the various branches of the bank.

Plans are in place to introduce telephone banking to allow customers to transfer funds between accounts, perform account inquiry and pay their utility bills without visiting the bank.

5.4 Promotion

E-mail to prospective customers informing them of the service. 16 Phone prospective customers or visit them at their residents or place of business to sell the service to them.

Advertise the service on our website.

Develop an advertising program targeting the selected group, and run adverts through media such as radio and television stations.

5.5 Personnel

Recruit a sales team from members of the staff who possess the required skills for the task.

Provide the members of the team with a formal written program of the project.

Provide each member of the team with a job description setting out clearly the job expectations and goals, as well as the required job-related behaviours.

Train the sales team for the job.

Provide the team with the necessary tools and resources, for instance, cell phones.

Provide the team with incentives, such as traveling allowances and rewards for sales volumes.

Develop a performance appraisal system that will allow for feedback throughout the year and will determine annual salary increments.

17 6. Implementation and Control

6.1 Implementation Table 1 presents a work program to implement the proposed marketing strategies.

Table 1 Implementation Schedule

O ta B a a p v l b in o rd p ro a S n itiz s ff a dp rs eth ir b y e s e ta n u u e u -in C n a t a a v r in a e c tofo u tea o tr c n d etis g g n y rm la n a v r in p n d etis g la S le t th s le te m e c e a s a T inth s le te m ra e a s a D v lo m n a in e tiv p g mfo th s le te m e e p e t n c n e ro ra r e a s a P v eth m m es o th s le te mw afo a ro id e e b r f e a s a ith rm l w npo ra o th p je t ritte r g m f e ro c P v ee c m m e o th s le te mw ajo ro id a h e b r f e a s a ith b d s rip n e c tio P v eth s le te mw th n c s a to ls s c ro id e a s a ith e e e s ry o , u h a c ll p o e s e hns C n tr c s e ia c u te fo s e ia s d n a c u t o s u t p c l o n r r p c l tu e t c o n h ld rs o e . H lda o ia la n h g o n ffic l u c in In ta s A M a th v rio s b n h s s ll ix T s t e a u ra c e In d c te p o eb n in tro u e le h n a k g E a po p c ec s m rs -m il r s e tiv u to e A v rtis th s rv eo o r w b ite d e e e e ic n u e s P o eo v it po p c ec s m rs h n r is r s e tiv u to e A v rtis th s rv eo th lo a ra ioa dte v io d e e e e ic n e c l d n le is n

B m J ly 2 1 y id u 0 1 B J ly 3 , 2 1 y u 1 01 B Ags 1 21 y uut , 01 B Ags 1 21 y uut , 01 B Ags 1,21 y uut 0 01 B Ags 1,21 y uut 5 01 B Ags 3,21 y uut 0 01 B Ags 3,21 y uut 0 01 B Ags 3,21 y uut 0 01 B Ags 3,21 y uut 0 01 2 e -1 -S p 1 S p m e 5- S p m e 1 , 2 1 e te b r e te b r 5 0 1 B S p me 2 , 2 1 y e te b r 0 0 1 D ily b g n gJ ly 2 1 a e in in u 0 1 D ily b g n gJ ly 2 1 a e in in u 0 1 D ily b g n gJ ly 2 1 a e in in u 0 1 D ily d rin J ly 2 1 , a da a u g u 01 n s n c s a th re fte w inb d e e e s ry e a r ith u g t W e ly d rin J ly 2 1 , a da ek u g u 01 n s n c s a th re fte w inb d e e e s ry e a r ith u g t

A v rtis inth lo a n w p p rs de e e c l e s ae .

18 6.2 Control

Table 2 presents a work program to assist Management in keeping the Bank on the course to success.

Table 2 Control Chart

Activity
Complete Performance evaluation of sales staff Review salaries and other incentives of the sals staff Measure financial results against projections Carry out survey to determine customers' satisfaction with the product and the service qualiy. Diagnose any gap / shortfall to ifentify the causes for such gap / shortfall and recommend corrective measures Take corrective action

Performed by

Date / Frequency

Marketing Manager Marketing Manager Marketing Manager / Accountant Internal Audit

Annually Annually Monthly / Quarterly / Annually Annually

Internal Audit

As necessary

Marketing Manager

As necessary

7. Financial Forecast

The attached projected financial statements (APPENDIX 1 and 2) have been prepared to show the effects of the results of the plan. Managements statements have been used as the bases from which the effects of the plan were incorporated.

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8. Conclusion

The situation facing Mfantsiman Rural Bank was considered and the objectives were clearly stipulated would. Critical considerations were given to both external and internal environments, and through a SWOT analysis have identified the strengths, weaknesses, opportunities and threats. The way forward has been determined by

identifying the marketing strategies, and by tabling the implementation and control mechanisms aimed at ensuring that the desired results are achieved.

20 APPENDIX 1

MFANTSIMAN RURAL BANK BALANCE SHEET AS AT THE END OF FISCAL YEAR 2009. GHS (000)

Assets Cash resources Securities Loan Customer liability under acceptance Fixed assets Other assets 167362 4400 3200 1679 16200 345 193186

Liability and shareholders equity Deposit Acceptance Other liabilities Subordinated debts Shareholders equity 174776 1100 2117 3240 11953 193186

21 APPENDIX 2

MFANTSIMAN RURAL BANK PROJECTED BALANCE SHEET AS AT SEPTEMBER 30, 2011. GHS (000)

Assets Cash resources Securities Loan Customer liability under acceptance Fixed assets Other assets 301600 6000 5500 2250 20500 600 336450

Liability and shareholders equity Deposit Acceptance Other liabilities Subordinated debts Shareholders equity 290500 3010 3400 4200 35340 335450

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