The effect of marketing capabilities on the performance of banking institutions with an emphasis on competitive dynamics (case study of branches of state-owned banks in Mazandaran province)

Academic Thesis for Master's degree (M.A.) Field: Business Management Marketing Orientation

Research Abstract

The banking industry is one of the most important and prominent industries in the world, today banks in advanced countries act as pioneers, professional consultants, experts in increasing the financial resources of companies and collecting and exchanging the necessary information for their customers. In modern banking, there are many components that affect the process of mobilizing monetary resources of banks and financial institutions. Identifying and determining the degree of influence and type of relationship of these components with the success of banks in mobilizing monetary resources is an important issue, this has caused a tight competitive environment to be established between them. . The success or failure of the bank cannot be imagined apart from the performance of the managers. A bank can be successful if it benefits from competent managers, various tools and its existing facilities and potential in line with the success of the group. The factors that lead to the bank's success are the use of information technology, marketing, customer orientation in its true sense and avoiding these slogans. By benefiting from competent managers and educated human resources, banks can have a permanent relationship with customers and the market and put the society under the microscope by creating changes and transformations.

Key words: market turbulence, competition intensity, decentralization, customer orientation, central competitor, tendency towards innovation and marketing capabilities.

Chapter 1

General research

1-1.Introduction

During the last two decades, market orientation has been the main basis of written works in the field of marketing. Behavioral perspective emphasizes on special activities related to production and distribution and response to business intelligence. (Kohli and Jaworski [2], 1990) Cultural perspective focuses on organizational criteria and values ??that promote market-oriented behaviors and includes three components: customer-oriented, competitor-oriented, and inter-task coordination. (Narver and Slater[3], 1990)

The assumed positive relationship between market orientation and business performance has been confirmed empirically in many articles and studies. In addition, this relationship seems to be strong and strong in various environmental conditions, in industrial sectors and cultural contexts. Companies can align themselves with the environment. (Song [4] et al., 2008)

Market-oriented may cause a company to focus only on the obvious needs of customers and neglect to understand the potential and hidden needs of current or new customers. According to past researchers' research, excessive reliance on customers hinders innovation and research and development activities and threatens a company's ability to introduce innovative products to the market. In addition, paying attention to the fact that the competitors of that company are also partially aware of the market orientation, this work may not only cause competitive advantage, but also cause costs that are assigned to the company to do a job or prevent a failure. (Teodosio et al., 2012)

Since banks, as the most important institutions of the financial market in Iran, due to the lack of expansion of the financial markets on the one hand and the national nature of the banks on the other hand, they have not enjoyed optimal efficiency, so it seems that the evaluation of the performance of banks in the country is of great importance. (Riyazat, 2013)

1-2. Statement of the problem

In line with the sustainable growth and development of countries, paying attention to the growth of organizations is one of the policies that all managers are interested in. Banks are no exception to this issue. The banking industry is one of the most important and prominent industries in the world. Nowadays, banks in advanced countries act as pioneers, professional consultants, experts in increasing the financial resources of companies and collecting and exchanging the necessary information for their customers, and they are considered one of the economic drivers of every country. In modern banking, there are many components that affect the process of equipping the monetary resources of banks and financial institutions.Identifying and determining the degree of influence and type of relationship of these components with the success of banks in mobilizing monetary resources is an important category. Today, the conditions and situations of financial institutions and banks are not the same and it is possible that the components influencing the mobilization of monetary resources are different even for each branch of a banking group. This has caused a tight competitive environment to be established between them. The concept of performance is defined by efficiency [5] and effectiveness [6], and they can be considered as two important dimensions of performance, that is, both internal causes (efficiency) and external causes (effectiveness) can exist for specific parts of the performance. Therefore, performance is a function of the efficiency and effectiveness of the activities. Banks should use progressive or forward-looking indicators [7] to achieve better performance. Retrospective indicators [8] only express historical events, while prospective indicators create conditions for the development of performance (Abbasqalipour, 2019, p. 24). The success or failure of the bank cannot be imagined apart from the performance of the managers. A bank can be successful if it takes advantage of its various tools and potential in the direction of the success of the bank Information, marketing, customer orientation in its true sense and avoiding towing these slogans. Bank managers must have the ability to recognize new market opportunities, and to achieve this ability, special and professional experts must be at the service of the group. By benefiting from competent managers and educated human resources, banks can have a permanent relationship with customers and the market and put the society under the microscope by creating changes and transformations (Abbasqalipour, 2019, p. 26). During the last two decades, market-oriented has been the main basis of works written in the field of marketing. They bring about the beneficial deployment of assets, they are different from assets that are not visible, in addition, capability is deeply rooted in organizational affairs and actions that cannot be traded or imitated. According to the marketing literature, market-related capabilities facilitate the effective use of market-based assets. These capabilities are usually related to marketing tasks and include individual marketing mix elements such as marketing processes. Therefore, marketing capabilities can be seen as organizational competencies that support market sensing and customer communication. (Zhu and Zhu [10], 2008, p. 987) Song considers marketing capabilities as an important resource for increasing competitive advantage. (Song et al., 2008, p. 38) Market turbulence refers to the change in the rate of customer mix and preferences, and is the main factor of instability and unpredictability. The environment is external, business units that operate in the turbulent market environment, deal with rapid changes in customer needs and preferences and unpredictable requirements and demands. In this way, due to the evolving needs and expectations of customers, they have a greater need for customer orientation, and a market-oriented approach helps banks to track changes in the customer environment and to manage demand uncertainty (Teodosio et al., 2012, p. 1061). Customer orientation means understanding the needs of customers and creating continuous superior value for them. It will be possible to create value for customers by increasing expected benefits and reducing costs. A core competitor focuses on in-depth evaluations of selected competitors. Under this type of strategic orientation, the business unit focuses on the competitor's goals, strategies, activities, proposals, resources and capabilities, as well as the dissemination of information obtained from this evaluation. (Teodosio et al., 2012, p. 1062) Delegating decision-making authority to managers and employees at lower levels of the organization, that is, people who are in direct contact with the customer. This delegation of authority should be done according to the criteria set by the supervision of banks to the branch, the delegation of authority will increase the decentralization and decentralization of branch decisions in the field of credit.