Use of Relationship Marketing as a Strategy for the Success of Investment Banks: A Comparative Study

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ACKNOWLEDGEMENT

I would like to thank my supervisors, friends and family. Without their support this research study would not have been possible.

DECLARATION

I adjudge that the entire content of this dissertation is entirely my own work; the content used in this dissertation has not been submitted before in any educational institution and represents my own opinion.

Signed __________________ Date _________________

ABSTRACT

The purpose of the study is to investigate the influence of independent variables on the degree of relationship marketing in investment banks, from both the clients and bank managers' perspectives. The focus of this work is a comparative study concerning the relationship marketing and customer retention of banks in South Africa, Canada, and the UK. Banking industries are facing numerous challenges in banking products and service provisions to clients worldwide. In order to build and maintain relationships with these clients, relationship marketing is the best possible strategy for investment banks. Relationship marketing helps in increasing customer retention, which is a necessity for investment banks to maintain their current, lucrative banking clients. The case study analysis and secondary research findings indicated that both the Canadian and UK banks are focusing on improving their communication channels, ethics, fees, modern technology, etc. South African banks meanwhile are way behind in implementing and ameliorating these variables. The UK and Canadian banks are focusing on these variables, which in the end are affecting CRM activities in a positive way. Although lots of loopholes exist in the CRM strategies implemented by international banks, their strategies are much more effective than South African banks. The financial returns depict the successful CRM strategies implemented by international banks. The secondary research findings discovered that in terms of the personalization of product and services offering-Canadian banks are on the top. On the other hand, in terms of fee structures, UK's banks are much better. South African banks are way behind in their fees structure, customization of products and services and successfully implementing customized products and services. Thus, it can be concluded that relationship marketing is useful for investment banks in UK, Canada, and South Africa. Investment banks (UK, Canadian banks) are effectively and efficiently implementing relationship-marketing strategies and because of this, they are achieving lucrative financial returns.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

LIST OF FIGURESVIII

LIST OF TABLESIX

CHAPTER 1: INTRODUCTION1

1.1 Background of the Study1

1.2 Investment Banking - An Overview2

1.3 Marketing - A Background Note4

1.4 Problem Statement5

1.5 Purpose of the Study6

1.6 Research Variables7

1.6.1 Independent variables7

1.6.2 Dependent variable7

1.7 Research Questions7

1.8 Research Objectives7

1.8.1 Primary research objective8

1.8.2 Secondary research objectives8

1.9 Significance of the Study8

1.10 Structure9

CHAPTER 2: LITERATURE REVIEW10

2.1 Introduction10

2.2 Marketing Function - An Overview12

2.3 Review of Relationship Marketing14

2.4 Customer Relationship and Satisfaction16

2.5 Relationship Marketing in the Context of Banking18

2.6 Relationship Marketing with Respect to Investment Banking and Financial Products22

2.7 Customer Loyalty and Its Dimensions in the Banking Services24

2.7.1 Customer loyalty24

2.7.2 Repeated - passive behavior25

2.7.4 Decision not to buy/contract26

2.7.5 Rational dependent behavior26

2.7.6 Trust27

2.7.7 Commitment28

2.8 Summary29

CHAPTER 3: METHODOLOGY31

3.1 Introduction31

3.2 Research approach31

3.3. Research Methodology32

3.3.1Qualitative method32

3.3.1.1 Secondary data collection ...