i

MARKETING STRATEGIES AND SALES PERFORMANCE IN THE COMMERCIAL

BANKS IN BUJUMBURA, BURUNDI

BY

GATEKA ELLA SANDRA

1164-05026-09394

A THESIS SUBMITTED TO THE COLLEGE OF ECONOMICS AND

MANAGEMENT SCIENCE IN PARTIAL FULFILMENT OF THE

REQUIREMENTS FOR THE AWARD OF THE MASTER’S

DEGREE IN BUSINESS ADMINISTRATION OF

KAMPALA INTERNATIONAL

UNIVERSITY

MARCH, 2019

ii

DECLARATION

I declare that this thesis is my own effort and has not been submitted to any institution of higher

learning for award of any degree except where due reference has been made.

______________________________ ______________________________

Gateka Ella Sandra Date

iii

APPROVAL

I declare that the work in this thesis was done by the student under my guidance as the

University supervisor and is ready for further examination.

_____________________________ ________________________

Dr. Olutayo, K. Osunsan Date

iv

DEDICATION

I dedicate this work to my father, Mr. Nishireko Cassien and my mother Ms. Bizimana Marie for

their boundless love for me and for taking me to school.

v

ACKNOWLEDGEMENT

My profound gratitude goes to the Almighty God for the gift of life and wisdom that He gave me

throughout my studies.

My warm appreciation goes to my parents who supported me throughout my life most

importantly academic life, May God reward them.

I would like to acknowledge and extend my sincere and hearty gratitude to my supportive

supervisors, Dr. Emenike O. Kalu, Dr. Olutayo, K. Osunsan, and Dr. Joseph B.K. Kirabo, Dr.

Augustine Wandiba for their critical reviews, expert advice, and regular availability to me

throughout the course of my research work.

I cannot forget my exemplary lecturers at the College of Economics and Management, especially

for their great assistance and excellent academic pieces of advice. I owe a special debt of

gratitude to all of them. Furthermore, I acknowledge the authors whose works have been cited in

this study.

I acknowledge with gratitude the contributions and co-operation made by the respondents from

the commercial banks that were surveyed for their willingness to provide the necessary

information when I visited their offices during the research process. Without their cooperation,

this study would have been impossible to accomplish.

Finally, my great appreciation goes to my sisters, Mugisha Ange Gynelle, Kaneza Erica Laura

and Nishimwe Nancy Kelly, and my friends, for their unconditional support. It is through them

that I successfully completed this piece of work.

vi

LIST OF ACRONYMS

BANCOBU Banque Commerciale du Burundi

BBCI Burundi Bank of Commerce and Investment

BCB Burundi Bank of Credit

BIF Burundian franc

CRDB Cooperative Rural Development Bank

CVI Content Validity Index

IBB Interbank Burundi

MNCs Multinational Corporations

PBT Profits Before Tax

ROA Return-on-Asset (ROA)

ROE Return-on-Equity

SMEs Small and Medium Enterprises

SPSS Statistical Package for Social Sciences

US United States

vii

TABLE OF CONTENTS

DECLARATION .......................................................................................................................................... ii

APPROVAL ................................................................................................................................................ iii

DEDICATION ............................................................................................................................................. iv

ACKNOWLEDGEMENT ............................................................................................................................ v

LIST OF ACRONYMS ............................................................................................................................... vi

LIST OF TABLES ....................................................................................................................................... xi

LIST OF FIGURES .................................................................................................................................... xii

ABSTRACT ................................................................................................................................................xiii

CHAPTER ONE ........................................................................................................................................... 1

INTRODUCTION ........................................................................................................................................ 1

1.0 Introduction ............................................................................................................................................. 1

1.1 Background to the Study ......................................................................................................................... 1

1.1.1 Historical Perspective .......................................................................................................................... 1

1.1.2 Theoretical Perspective ........................................................................................................................ 3

1.1.3 Conceptual Perspective ........................................................................................................................ 4

1.1.4 Contextual Perspective ......................................................................................................................... 4

1.2 Problem Statement .................................................................................................................................. 6

1.3 Purpose of the Study ............................................................................................................................... 6

1.4 Objectives of the Study ........................................................................................................................... 7

1.5 Research Questions ................................................................................................................................. 7

1.6 Hypotheses .............................................................................................................................................. 7

1.7 Scope of the Study .................................................................................................................................. 7

1.7.1 Geographical Scope ............................................................................................................................. 7

1.7.2 Content Scope ...................................................................................................................................... 8

1.7.3 Times Scope ......................................................................................................................................... 8

1.8 Significance of the Study ........................................................................................................................ 8

1.9 Operational definition of key terms ........................................................................................................ 9

CHAPTER TWO ........................................................................................................................................ 11

LITERATURE REVIEW ........................................................................................................................... 11

2.0 Introduction ........................................................................................................................................... 11

viii

2.1 Theoretical Review ............................................................................................................................... 11

2.2 Conceptual Review ............................................................................................................................... 13

2.3 Review of Related Literature ................................................................................................................ 14

2.3.1 Marketing Strategy ............................................................................................................................. 14

2.3.1.1 The Effect of Product on Sales Performance .................................................................................. 14

2.3.1.2 The Effect of Price on Sales Performance ...................................................................................... 18

2.3.1.3 The Effect of Place on Sales Performance ...................................................................................... 20

2.3.1.4 The Effect of Promotion on Sales Performance .............................................................................. 23

2.3.2 Sales Performance .............................................................................................................................. 27

2.3.2.1 Sales volume ................................................................................................................................... 28

2.3.2.3 Profitability ..................................................................................................................................... 29

2.4 Empirical Studies .................................................................................................................................. 31

2.5 Literature Gap ....................................................................................................................................... 33

CHAPTER THREE .................................................................................................................................... 34

METHODOLOGY ..................................................................................................................................... 34

3.0 Introduction ........................................................................................................................................... 34

3.1 Research Design .................................................................................................................................... 34

3.2 Target Population .................................................................................................................................. 34

3.3 Sample Size ........................................................................................................................................... 35

3.3.1 Quantitative Sample Size ................................................................................................................... 35

3.3.2 Qualitative Sample Size ..................................................................................................................... 36

3.4 Sampling Technique ............................................................................................................................. 36

3.5 Data Source ........................................................................................................................................... 37

3.5.1 Primary Source ................................................................................................................................... 37

3.6 Data Collection Methods ...................................................................................................................... 37

3.6.1 Surveys ............................................................................................................................................... 37

3.6.2 Interviews ........................................................................................................................................... 37

3.7 Research Instruments ............................................................................................................................ 37

3.7.1 Questionnaires .................................................................................................................................... 38

3.7.2 Key Informant Interviews .................................................................................................................. 38

3.8 Validity and Reliability ......................................................................................................................... 38

3.8.1 Validity .............................................................................................................................................. 38

ix

3.8.2 Reliability ........................................................................................................................................... 39

3.9 Data Gathering Procedure ..................................................................................................................... 41

3.10 Data Analysis ...................................................................................................................................... 42

3.11 Ethical Consideration .......................................................................................................................... 44

CHAPTER FOUR ....................................................................................................................................... 45

DATA PRESENTATION, ANALYSIS AND INTERPRETATION ........................................................ 45

4.0 Introduction ........................................................................................................................................... 45

4.1 Response Rate ....................................................................................................................................... 45

4.2 Demographic Characteristics of the Respondents................................................................................. 45

4.3 The Descriptive Statistics for Marketing Strategy ................................................................................ 47

4.4 The Descriptive Statistics for Sales Performance ................................................................................. 53

4.5 The Effect of Product on Sales Performance in the Commercial Banks in Bujumbura ....................... 57

4.6 The Effect of Price on Sales Performance in the Commercial Banks in Bujumbura ............................ 58

4.7 The Effect of Place on Sales Performance in the Commercial Banks in Bujumbura ........................... 59

4.8 The Effect of Promotion on Sales Performance in the Commercial Banks in Bujumbura ................... 59

CHAPTER FIVE ........................................................................................................................................ 63

DISCUSSION OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS .................................. 63

5.0 Introduction ........................................................................................................................................... 63

5.1 Summary of Major Findings ................................................................................................................. 63

5.2 The Discussions of the Major Results ................................................................................................... 63

5.2.1 The Effect of Product on Sales Performance in the Commercial Banks in Bujumbura .................... 63

5.2.2 The Effect of Price on Sales Performance in the Commercial Banks in Bujumbura ......................... 64

5.2.3 The Effect of Place on Sales Performance in the Commercial Banks in Bujumbura ........................ 65

5.2.4 The Effect of Promotion on Sales Performance in the Commercial Banks, Bujumbura ................... 66

5.2.5 The Effect of Marketing Strategy on Sales Performance among Commercial Banks in Bujumbura,

Burundi ....................................................................................................................................................... 67

5.3 Conclusions ........................................................................................................................................... 67

5.4 Recommendations ................................................................................................................................. 69

5.4.1 The Effect of Product on Sales Performance in the Commercial Banks in Bujumbura .................... 69

5.4.2 The Effect of Price on Sales Performance in the Commercial Banks in Bujumbura ......................... 69

5.4.3 The Effect of Place on Sales Performance in the Commercial Banks in Bujumbura ........................ 69

5.4.4 The Effect of Promotion on Sales Performance in the Commercial Banks, Bujumbura ................... 70

x

5.5 Contribution to New Knowledge .......................................................................................................... 70

5.6 Areas of further Research ..................................................................................................................... 71

5.7 Limitations of the Study ........................................................................................................................ 71

References ................................................................................................................................................... 72

APPENDIX I: TRANSMITTAL LETTER ................................................................................................ 91

APPENDIC II: INFORMED CONSENT ................................................................................................... 92

APPENDIX III: QUESTIONNAIRES ....................................................................................................... 93

APPENDIX IV: KEY INFORMANT INTERVIEWS ............................................................................... 97

APPENDIX V: MAP SHOWING LOCATION OF COMMERCIAL BANKS IN BURUNDI ................ 98

APPENDIX VI: EXTRACTED DATA ...................................................................................................... 99

xi

LIST OF TABLES

Table Page

1.1 Performance of Commercial Banks in Burundi 5

1.2 Location of Commercial Banks under Study 8

3.1 Target Population and Sample Size Distribution 37

3.2 Qualitative Sample Size 38

3.3 Pearson Linear Correlation Coefficient 41

3.4 Interpretation of Cronbach‟s Alpha Results 42

3.5 Cronbach‟s Results of the Pilot study 42

4.1 Demographic Characteristics of the Respondents 47

4.2 Marketing Strategy 49

4.3 Sales Performance 55

4.4 The Effect of Product on Sales Performance in the Commercial Banks in

Bujumbura

58

4.5 The Effect of Price on Sales Performance in the Commercial Banks in

Bujumbura

59

4.6 The Effect of Place on Sales Performance in the Commercial Banks in

Bujumbura

60

4.7 The Effect of Promotion on Sales Performance in the Commercial Banks in

Bujumbura

61

4.8 The Effect of Marketing Strategy on Sales Performance in the Commercial

Banks in Bujumbura

62

4.9 Multiple Regression Analysis for the Effect of Marketing Strategies on Sales

Performance

63

xii

LIST OF FIGURES

Figure Page

2.1 Showing the Conceptual framework 13

xiii

ABSTRACT

The sales performance of commercial banks in Burundi has been averagely low in the period

between 2015 and 2016. This was due to the outstanding amount of loans that decreased by

6.8%, from BIF 858.371,3 2015 to 800.053,2 million in July 2016. This study investigated the

effect of marketing strategies on sales performance in the commercial banks in Bujumbura,

Burundi. The objectives that guided the study included the following: i) to determine the effect

of product on sales performance of commercial banks in Bujumbura; ii) to examine the effect of

price on sales performance of commercial banks in Bujumbura; iii) to evaluate the effect of place

on sales performance of commercial banks in Bujumbura; and to establish the effect of

promotion on sales performance of commercial banks, Bujumbura. The study used a descriptive

research design. The target population of the study was 337 respondents. Slovene‟s formula was

used to come up with a sample size of 183 respondents. The main research instruments included

questionnaires and key informant interviews. The retrieved questionnaires were 172, accounting

for 94% response rate. Quantitative data was analyzed using frequency and percentage tables,

mean and standard deviations, and inferential statistics. Qualitative data was analyzed using

manual coding of transcripts. The study found that product as a marketing strategy does not

significantly affect sales performance among commercial banks in Burundi (Adjusted R2=0.001,

p=0.276). Furthermore, the study found out that price as a marketing strategy used by the

commercial banks of Burundi does not significantly affect sales performance (Adjusted

R2=0.002, p=0.255). On the other hand, the study found out that place as a marketing strategy

used by the commercial banks of Burundi significantly affect sales performance (Adjusted

R2=0.043, p=0.004). In addition, the study found out that promotion as a marketing strategy used

by commercial banks significantly affect sales performance (Adjusted R2=0.058, p=0.001).

Overall, the study revealed that marketing strategies significantly affect sales performance

(Adjusted R2=0.033, p=0.009). The study concluded that product and price as marketing

strategies do not significantly affect sales performance while place and promotion as marketing

strategies significantly affect sales performance. The study made the following

recommendations: the management of the commercial banks should develop and test their

products to confirm their adaptability and suitability to the target customers, they should

endeavor to ensure that they adopt affordable pricing strategies such as free samples and bonus

packs, discounts, personal selling and penetration pricing and should emphasize the use of

personal selling and publicity to promote their products and services. This study adds to the body

of new knowledge that the banking institutions should emphasize equally on price and product

for them to capture more customers and increase their sale volume and consequent increase in

sales performance.

1

CHAPTER ONE

INTRODUCTION

1.0 Introduction

This chapter covered the background of the study, problem statement, purpose of the study,

research objectives and questions, hypotheses, scope of the study, significance of the study and

operational definition of key terms.

1.1 Background to the Study

This section of the chapter looked at the historical perspective, theoretical perspective,

conceptual perspective and contextual perspective.

1.1.1 Historical Perspective

The practice of marketing goes back thousands of years, however, the academic discipline of

marketing emerged much more recently, starting around the turn of the twentieth century in the

United States (US) (Shaw, 2012). In the years of 2001, 2002, 2003, 2004, companies across

Europe and US embraced marketing strategies such as internet marketing, coherent marketing

approach which aimed at specific national and international markets, intensive store marketing

strategy, operational excellence, customer intimacy, and product leadership as employed by

WalMart, team marketing as was employed by The Atlanta Group, Compare & Contrast strategy

as employed by Ford Motor Co, and dominating single market as employed by Samsung Group

(Nanda & Khanna, 2011).

Indeed the current globalization market has made companies to see the internationalization of

their activities as a way to remain competitive. Therefore, marketing strategy has become an

important tool globally for any banking institution to remain in competitive market environment

(Ojo, 2012). With the growing importance of the financial sector, pressures are escalating for

more effective marketing management of the financial services. Effective marketing strategies

are the key to frontline sales performance. Financial institutions typically use a variety of sales

tools and processes to achieve their sales goals. Among the best practices of those with highly

successful sales programs is having the marketing strategies provided to management and front

line staff at all branches that describes tools and processes in detail, helping to ensure that

2

everyone involved in sales, no matter how remotely, operates on a coordinated basis (Ishola et

al., 2017).

In sub-Saharan Africa, and in this twenty first century, marketing is playing a vital role in the

banking industry. This is because the banking sector is an integral part of the economy. It

therefore implies that a weak banking sector not only jeopardizes the long-term sustainability of

an economy, but also be a trigger for a financial crisis which can lead to economic crises

(Papadopoulos & Hamzaoui-Essousi, 2015). Because of the importance of the banking sector to

the economy, majority of the banking institutions in the continent are now putting emphasis on

marketing to make customers aware about the services and benefits offered by them (Dadzie et

al., 2018). There has been observed a tendency of opening one window for Islamic banking in

already running conventional banks in order to meet the requirements of the consumers and to

retain the customers (Bhatt & Gor, 2012). Marketing strategies must be analyzed and tackled

carefully for any growing industry in order to get sustainable development. Marketing strategy is

one of the most important issues that must be examined carefully in order to improve

performance and ensure sustainable growth of banks as competition in the banking industry

intensifies (Mwania, 2017).

For instance in Kenya, the banking industry has been faced with stiff competition of late and

many local banks have been forced to wind up. The main reasons being failure to embrace

effective marketing strategies that could have enabled it operate optimally in the volatile banking

sector (Adefulu, 2015). For years, defined business has proved to be a hindrance to the growth

and development of the banking industry. In essence, competition has effortlessly brought down

several economies to their knees. For many businesses, marketing strategies has been the way to

approach the volatile banking business while to some, customer satisfaction, a sound customer

relationship and effective communication has been their main marketing strategic tool (Muchina

& Okello, 2016). Leadership in contemporary organizations has been left to ponder for what they

should do in order to be at a competitive edge and be a benchmark to other banks in the banking

industry (Tangus & Omar, 2017). For other banks such as those in Rwanda, diversification has

been the way to approach the volatile banking business but legislation on banking business has

often negatively affected venturing into other business other than the banking business hence

greatly affecting their sales performance and sustainability (Ngango et al., 2015).

3

In Burundi, due to high competition among commercial banks, banks have tried to come up with

new strategies so as to improve their sales performances (Nkurunziza et al., 2012). The Burundi

Banking sector has been undergoing a lot of challenges in its growth over the past 5 years

because of political turmoil and interference. However, the industry continues to offer significant

profit opportunities for the major participants and has attracted international banks such as

Kenya Commercial Bank, Access Bank and CRDB Bank Burundi. These international banks

together with the local banks expanded financial services to millions of poor households

especially via mobile phones. Because majority of the Burundi bankable population is unbanked,

it has compelled banks to adopt new marketing strategies so as to diversify the bank products and

services to reach these millions of people. As a way of expanding the market share and need to

reach the unbanked in the local set up, banks in Burundi have adopted agency banking as one of

the diversification strategies (Ndikumana, 2014).

Furthermore, through the continuous modification and rectification in banking and

implementation of financial sector reforms as per the recommendation of the Committee on

Financial System, the functioning of banks in Burundi has undergone dramatic changes. Starting

from very conservative traditional banking where the service of banks was confined to a few in

the society, now due to liberalization and privatization, a 'U' turn has taken place in Burundian

banking (Gwatizo, 2013). The hallmark of the changed concept is aimed at having a full view of

customers' needs and increasing sales performance.

1.1.2 Theoretical Perspective

This study was anchored on Marketing Mix Theory founded by Borden (1965) and extended by

(Kotler & Keller, 2006). The theory is premised on the assumption that all aspects of the

marketing plan are organized around the habits, desires and psychology of the target market. The

theory is still used today to make important decisions that lead to the execution of a

marketing plan. Marketing Mix Theory combines a number of components in order to

strengthen and solidify a product‟s brand and to help sell the product or service. The

components combined by this are products, price, promotion and place forming the Four P‟s.

These four P‟s are the parameters that the marketing manager can control, subject to the internal

and external constraints of the marketing environment. The goal is to make decisions that centers

4

the four P's on the customers in the target market in order to create perceived value and

generate a positive response.

1.1.3 Conceptual Perspective

A marketing strategy is a business's overall game plan for reaching people and turning them into

customers of the product or service that the business provides (Minchin & Alpert, 2017).

Furthermore, Chan (2018) defined marketing strategy as a long-term, forward-looking approach

to planning with the fundamental goal achieving a sustainable competitive advantage. In

addition, marketing strategy is a process or model to allow a company or organization to focus

limited resources on the best opportunities to increase sales and thereby achieve a sustainable

competitive advantage (Kudyrko & Sevruk, 2016). On the other hand, West et al., (2010) defined

marketing strategy as the comprehensive plan formulated particularly for achieving the

marketing objectives of the organization. According to Kotler (2015), marketing strategies;

product, price, place and promotion are strategies that organizations use to react to market and

internal forces that will enable an organization achieve their objective. In this study, marketing

strategies were operationalized using Kotler‟s (2015) model of product, price, place and

promotion.

Sales performance is a combination of sales effectiveness - the ability of a company‟s sales

professionals to “win” at each stage of the customer‟s buying process, and ultimately earn the

business on the right terms and in the right timeframe and sales efficiency - the speed at which

each task in the sales process is performed (Rogers, 2014). According to Zhang and Tang (2010),

sales performance is a direct inducement that offers an extra value or incentive for the product to

the sales force distributors or consumer with the primary objective of creating an immediate sale.

According to Dean (2015), sales performance indicates the rate of customer loyalty to the

business or a specific employee. In this study, sales performance was operationalized using: sales

volume, and profitability.

1.1.4 Contextual Perspective

Commercial banks in Burundi offer a wide range of banking products and services to small and

medium size customers such as mortgage finance, loans, corporate, retail and commercial

banking services (Ndikumana, 2014). The banking sector of Burundi comprises ten commercial

banks, including Diamond Trust Bank which opened in 2009. The banking sector is highly

5

concentrated with the three largest banks, the Banque de Crédit de Bujumbura (BCB), Banque

Commerciale du Burundi (BANCOBU), and Interbank Burundi (IBB) accounting for a

commanding share of the market 65 percent, 69 percent of deposits, 76 percent of total assets as

indicated in the table blow.

Table 1.1: Performance of Commercial Banks in Burundi

Bank Name Year of creation Branches Total assets

(million BIF)

Deposits

(million BIF)

Banque Commerciale du

Burundi (BANCOBU)

1964 14 187.627 124.261

Burundi Bank of Credit

(BCB)

1964 21 324.334 238.865

Burundi Bank of

Commerce and

Investment (BBCI)

1988 10 84.310 45.918

Interbank Burundi (IBB) 1992 24 316.036 227.527

Source: (Rutumwako & Kaneza, 2018)

However, even with the dominance of the above mentioned three banks, the banking industry in

Burundi faces the challenges of fluctuating demand and stiff competition. The competitive

environment in the banking industry is widely recognized as being complex, dynamic, and

highly segmented which makes customers acquisition an uphill task. Increasingly banking

companies are competing directly with one another in the same locations (Rutumwako &

Kaneza, 2018).

The banking industry in Burundi is characterized by price competition, customer sophistication,

and perceived product equality. Changing market growth rates and shifting market shares are key

determinants of the competitive environment in Burundi (Gwatizo, 2013). Due to intense market

competition, bank profitability on average has been inconsistent. In the period 2008-2013,

increases in Profits before Tax (PBT) has been below 20% on average terms. In the year 2014

PBT of the Burundian commercial banks increased by 16.6% and again dropped to 16.2% in

2015 (Dridi, 2016).

6

1.2 Problem Statement

The sales performance of commercial banks in Burundi has been averagely low in the period

between 2015 and 2016. Banking sector assets largely consists of loans and Treasury securities

with shares of 45.5 and 22.2% of total assets respectively (Bank of the Republic of Burundi,

2016). However, the outstanding amount of loans decreased by 6.8%, from BIF 858.371,3 in

2015 to 800.053,2 million in July 2016. Compared to the same period of the previous year, the

banking sector‟s profitability decreased due to the increase of the impaired loans. Indeed, the

sectoral net profit decreased by 7%, falling from BIF 17,364.1 to 16,142.7 million in July 2016.

Additionally, the banking sector profitability as measured by the return-on-Asset (ROA) and the

return-on-equity (ROE) ratios also slightly decreased from 1.4 to 1.2% and from 9.5% to 8.0%

respectively from July 2015 to July 2016 (Bank of the Republic of Burundi, 2016).

The above illustrated poor sales performance of the banking sector could be attributed to factors

such as limited access to credit and banking services, political pressure, mismanagement, and

undercapitalization which limits banks‟ lending capacity to large clients (Nkurunziza, et al.,

2011). In addition, the banks have over the same period (2015-2016) used different methods such

as employee training and upgrade of technology in order to enhance their sales performance but

this effort registered limited success.

However, given the importance of marketing strategies in promoting and realizing better sales

performance among the banking institutions, it was imperative that a study be done to investigate

the effect of marketing strategies in terms of products, price, place and promotions on the sales

performance of the commercial banks in Bujumbura, Burundi.

1.3 Purpose of the Study

To determine the effect of marketing strategies on sales performance in the commercial banks in

Bujumbura, Burundi.

7

1.4 Objectives of the Study

i. To determine the effect of product on sales performance of commercial banks in

Bujumbura.

ii. To examine the effect of price on sales performance of commercial banks in Bujumbura.

iii. To evaluate the effect of place on sales performance of commercial banks in Bujumbura.

iv. To establish the effect of promotion on sales performance of commercial banks,

Bujumbura.

1.5 Research Questions

i. What is the effect of product on sales performance of commercial banks in Bujumbura?

ii. What is the effect of price on sales performance of commercial banks in Bujumbura?

iii. What is the effect of place on sales performance of commercial banks in Bujumbura?

iv. What is the effect of promotion on sales performance of commercial banks, Bujumbura?

1.6 Hypotheses

i. Ho1: There is no significant effect of product on sales performance of commercial banks

in Bujumbura.

ii. Ho2: There is no significant effect of price on sales performance of commercial banks in

Bujumbura.

iii. Ho3: There is no significant effect of place on sales performance of commercial banks in

Bujumbura.

iv. Ho4: There is no significant effect of promotion on sales performance of commercial

banks, Bujumbura.

1.7 Scope of the Study

1.7.1 Geographical Scope

This study was conducted in Bujumbura which is the capital city of Burundi. Bujumbura has ten

(10) commercial banks; however, the study was conducted in only four (4) commercial banks

because they are the largest and most dominant in the banking sector of Burundi. The banks are

listed in the table below.

8

Table 1.2: Location of Commercial Banks under Study

Bank Name Location/address

Interbank Burundi Located on Plot 15 Avenue de l‟Industrie

P.O. Box 2970

Bujumbura, Burundi

Banque Commerciale du Burundi (BANCOBU) Located on Plot 84, Chaussée P.L.

Rwagasore

P.O. Box 990

Bujumbura, Burundi

Burundi Bank of Commerce and Investment

(BBCI)

Located on Avenue du Peuple Murundi

P.O. Box 2320

Bujumbura, Burundi

Burundi Bank of Credit (BCB) Located on Avenue Patrice Lumumba

P.O. Box 300

Bujumbura, Burundi

1.7.2 Content Scope

The study was confined to marketing strategies (independent variable), which was measured

using product, price, place, and promotion. On the other hand, sales performance (dependent

variable) was measured using sales volume and profitability.

1.7.3 Times Scope

This study took a period of one (1) year, that is, from October, 2017 to October, 2018. This

period comprised of writing concept note, proposal, field data collection, data analysis and thesis

write up.

1.8 Significance of the Study

It is hoped that the findings of this study will be significant to policy makers because they will

have the capacity of being used to formulate positive fiscal policies which are relevant and

sensitive to the forces influencing the banking sector performance and penetration in Burundi.

In addition, the findings of this study will be instrumental to the government and particularly the

Ministry of Finance for making policy decisions whose overall objectives are to reduce

bottlenecks in distribution of banking services and at the same time accelerate the rate of growth

9

in the banking industry sector and take advantage of the improved economy thus more lending to

individuals and institutions.

Similarly, the results of this study will help the firms in the banking industry in formulating

marketing strategies that improve their effectiveness at national and international levels. The

stakeholders and employees in Burundi‟s banking sector would appreciate and prioritize

appropriate marketing strategies as tools of marketing positioning in local and international

markets.

Furthermore, this study will help in the management of commercial banks to evaluate how

effective they have been in adopting appropriate distribution channel strategies of their services

and products. This may enable them identify gaps in their strategies which may enhance their

strategic response as a result move to effectively manage the existing strategies which will

improve their sales performance.

Last but not least, the results of this study will help the academicians, scholars, and future

researchers to reference it as a source since it will contribute to the existing literature in the field

of marketing and sales performance.

1.9 Operational definition of key terms

Marketing Strategy: refers to the set of marketing tools used by an enterprise to achieve the

objectives of the adapted marketing in the particular marketing segment using product, price,

place and promotion strategies.

Product: refers to the ability of the commercial banks to offer a broad product line, offer

products with a broad market appeal, use of good packaging to influence perceived product

quality and the use of good product‟s brand image to influence profitability.

Price: refers to price strategies such as lower prices, discounts, and bonus packages used by

commercial banks to increase sales volumes subsequent increase in sales performance.

Place: refers to bank location, physical features, and product availability that influence customer

loyalty.

10

Promotion: refers to when banks use advertisements on various media platforms, and direct

marketing intended at attracting customers.

Sales volume: refers to the number of products or services sold by the commercial banks within

a given reporting period.

Profitability: refers to the ability of a commercial bank to use its resources and generate

revenues in excess of its expenses.

11

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter looked at the literature regarding the study constructs reviewed from different

scholars and publications. The chapter will be subdivided into theoretical review, conceptual

review and empirical studies.

2.1 Theoretical Review

This study was anchored on the theory of Marketing Mix founded by Borden (1965) and

extended by (Kotler & Keller, 2006). The theory is premised on the assumption that all aspects

of the marketing plan are organized around the habits, desires and psychology of the target

market. The theory is still used today to make important decisions that lead to the

execution of a marketing plan. Marketing Mix Theory combines a number of components

in order to strengthen and solidify a product‟s brand and to help sell the product or service.

The components combined by this are products, price, promotion and place forming the Four

P‟s. These four P‟s are the parameters that the marketing manager can control, subject to the

internal and external constraints of the marketing environment. The goal is to make decisions

that centers the four P's on the customers in the target market in order to create perceived

value and generate a positive response.

The marketing mix framework was particularly useful in the early days of the marketing concept

when physical products represented a larger portion of the economy (Gronroos, 1994). Today,

with marketing more integrated into organizations and with a wider variety of products and

markets, some authors have attempted to extend its usefulness by proposing a fifth P, such as

packaging, people, process, etc. Today however, the marketing mix most commonly remains

based on the 4 P's. Despite its limitations and perhaps because of its simplicity, the use

of this framework remains strong and many marketing textbooks have been organized around

it.

This orientation considers marketing as it applies to the theory of the "4 Ps." The first P is

product, and takes into account its design, features and competitors. The second P, price, is a

factor that can be adjusted to manage demand, to determine profit margin, and to drive market

12

share. Promotion is the third P. It seeks to find which media to engage in order to make the right

people aware of the product's benefits, and which slogans, tag lines and logos will resonate with

the target market. Placement, the fourth P, determines where and how potential customers can

access the product. Young people may want to browse, buy and pay online. Others may prefer

the personal service of a trained salesperson (Išoraitė, 2016).

Later Robert (2000), proposed a four Cs classification in which is a more consumer-oriented

version of the four Ps that attempts to better fit the movement from mass marketing to niche

marketing. The Cs represents; Consumer, cost, communication and convenience. Firstly, a

company will only sell what the consumer specifically wants to buy. So, marketers should study

consumer wants and needs in order to attract them one by one with something he/she wants to

purchase. Secondly, Price is only a part of the total cost to satisfy a want or a need.

The total cost will consider for example the cost of time in acquiring a good or a service, a cost

of conscience by consuming that or even a cost of guilt "for not treating the kids. It reflects the

total cost of ownership. Many factors affect cost, including but not limited to the customer's cost

to change or implement the new product or service and the customer's cost for not selecting a

competitor's product or service (Richard, 2009). Thirdly, while promotion is manipulative and

from the seller, communication is cooperative and from the buyer with the aim to create a

dialogue with the potential customers based on their needs and lifestyles; it represents a broader

focus. Communications can include advertising, public relations, personal selling, viral

advertising, and any form of communication between the organization and the consumer.

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2.2 Conceptual Review

The relationship between marketing strategies and sales performance among in the

commercial banks in Bujumbura, Burundi

Independent Variable

Source: Adapted from Gituma (2017), Kasiso (2017), and Muthengi (2017)

Fig 2.1: Showing the Conceptual framework

The independent variable of this study is the marketing strategies which are measured using the

4Ps that is, product, price, place and promotion. The dependent variable is sales performance

which has been measured using sales volume and profitability. The relationship between the two

variables is that when a customer uses the 4Ps as its marketing strategies, for instance, if a

banking institution provides products that are of good quality, unique and satisfactory to the

customers, there will be increase in sales volume and subsequent increase in profitability. In

addition, if a banking institution provides prices that are affordable for their products and

services, the customers will prefer to buy such products hence causing increase in sales volume

and high level of profits. In addition, if a banking institution is located in a place that is

accessible and secure for the customers to do their transactions, they will easily be satisfied with

the services and this will cause them to prefer buying such a service or product hence causing

increase in sales volume and subsequent increase in profitability. Lastly, if a banking institution

does promotion on different media platforms, it will increase customer awareness of the

availability of a given product or service, hence prefer to purchase it. This will cause increase in

sales volume. In the event that the customers are satisfied with the product or the service, they

will purchase more hence causing increase in the level of profitability for the banking institution.

Marketing Strategies

Product

Price

Place

Promotion

Sales Performance

Sales volume

Profitability

Dependent Variable

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2.3 Review of Related Literature

2.3.1 Marketing Strategy

Marketing strategy is the fundamental goal of increasing sales and achieving a sustainable

competitive advantage (Silva, 2016). Marketing strategy includes all basic, short-term, and long-

term activities in the field of marketing that deal with the analysis of the strategic initial situation

of a company and the formulation, evaluation and selection of market-oriented strategies and

therefore contributing to the goals of the company and its marketing objectives (Gituma, 2017).

Marketing strategy allows firms to develop a plan that enables them to offer the right product to

the right market with the intention of gaining competitive advantage. A marketing strategy

provides an overall vision of how to correctly position products in the market place while

accounting for both internal and external constraints (Heiner & Muhlbacher, 2010).

According to Muthengi (2017), marketing strategy is a method of focusing an organization's

energies and resources on a course of action which can lead to increased sales and dominance of

a targeted market niche. A marketing strategy combines product development, promotion,

distribution, pricing, relationship management and other elements; identifies the firm's marketing

goals, and explains how they will be achieved, ideally within a stated timeframe. Furthermore,

Kasiso (2017) argues that marketing strategy determines the choice of target market segments,

positioning, marketing mix, and allocation of resources. It is most effective when it is an integral

component of overall firm strategy, defining how the organization will successfully engage

customers, prospects, and competitors in the market arena of corporate strategies, corporate

missions, and corporate goals. As the customer constitutes the source of a company's revenue,

marketing strategy is closely linked with sales. A key component of marketing strategy is often

to keep marketing in line with a company's overarching mission statement (Pembi et al., 2017).

2.3.1.1 The Effect of Product on Sales Performance

Product is defined as a physical product or service to the consumer for which he is willing to

pay. It includes half of the material goods, such as furniture, clothing and grocery items and

intangible products, such as services, which users buy (Cui & Tingjui, 2016). According to Bintu

(2017), a product is the first and one of the key marketing elements. Kotler and Armstrong

(2013) noted that product is anything that can be offered to a market for attention, acquisition,

use, or consumption hence satisfying customer‟s want or need. Ferri (2017) assert that product is

15

a marketing mix strategy in which organizations offers consumers symbolic and experiential

attributes to differentiate products from competitors. Gbolagade et al., (2018) researched on the

impact of marketing strategy on business performance in Nigeria and established a significant

influence between product and business performance. Similarly, Owomoyela et al., (2017)

researched on the impact of marketing mix elements on consumer loyalty. The findings revealed

that product had an influence on customer loyalty hence increase in performance.

Kiprotich (2018) noted that quality is an important element in the design and manufacture of

products which are considered superior to those of competitors. According to Ardjouman and

Asma (2015), customers increasingly expect products to be of high quality. Hence, product

quality is often considered to contribute to the development of a firm‟s competitive advantage.

Product quality is extent to which a product succeeds to meet the needs of its customer (Cavusgil

& Zou, 2014). Ebitu (2016) state that perceived quality refers to customer‟s evaluation of a

product or a brand that meet an individual‟s expectation.

According to Kisaka (2019), product quality, efficiency and business results affect firm

performance measures. Mahmood and Fatimah Hajjat (2014) researched on the effect of product

quality on business performance in some Arab Companies. A model was developed to illustrate

the product development stages from conception to distribution. The research analyzed data

using structural equation modeling techniques. Findings revealed that product extrinsic value

influences external performance and product intrinsic value influences internal performance.

Nirusa (2017) conducted a research on the mediating role of perceived product quality. Survey

was used on 105 firms. It was revealed that a relationship between organizational capability and

perceived product quality exists.

According to Onyango (2016), product package contains visual and sensual attributes which

communicate to consumers. A product package is a container that has a direct contact with the

product, protects, preserves and identifies the product. Good package design requires knowledge

of materials, their properties, manufacturing methods and conversion process (Njoroge, 2015).

Package design not only increases the visibility of the product it also helps in easy recognition of

the product. Furthermore, improvements in product packaging revitalize brands leading to

increase in sales (Immonen, 2010). Package designs has an effect on consumer belief about the

16

products and consumption beliefs leading to higher purchase decision and increase in sales

volume (Horsky & Honea, 2012).

According to Kotler (2015), product packaging is used to attract attention, describe the product

and clutter on retailer shelves hence motivates customers to purchase a product. Keramati (2015)

suggested that packages should be exciting and safe and of high quality. In addition, colors used

on the package should be perceived and associated with quality attributes. Edward (2013)

conducted a research on the influence of visual packaging design on perceived food product

quality, value, and brand preference. It was established that attitudes toward visual packaging

directly influence consumer-perceived food product quality and brand preference.

Holmes and Paswan (2012) conducted a research on consumer reaction to new package design.

Based on their study, it was suggested that a combination of product quality and price influences

customers purchase intention. Packaged goods that were priced low received less attention than

products that were highly priced. In addition, studies had also suggested that customer attitude

towards product package and quality influences their purchase decision to buy products that have

low prices (Holmes & Paswan, 2012).

Kamotho (2017) conducted a research on influence of packaging and labeling on consumer

perception of hair care products quality. The study used descriptive research design. Sixty hair

dressers and sixty salon customers were sampled. It was established that icon, symbols, font size

and patterns, usage instructions, country of origin and information were example of package

label attributes that customers looked for when buying a product. It was suggested that hair care

companies should put more emphasis on the product, package appearance and colors they use on

their package. Through this, hair care companies would be able to attract customer‟s attention

and influence purchase intention.

Rizwan et al., (2014) researched on the impact of product packaging on consumer‟s buying

behavior. The study found out that product packaging influenced consumer purchase decision. It

was concluded that packaging elements such as color, design of wrapper, packaging material

were factors consumers considered before purchasing a product. In a similar study, Saeed et al,

(2013) conducted an investigation on the effect of labeling on customer buying behavior in

Sahiwal, Pakistan. Quantitative research was used. Data was collected through survey. The study

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sampled 100 customers. It was established that product labeling influenced consumer buying

behavior.

Apart from product packaging, Yi (2015) revealed that brand identity also influences band equity

thus creating customer appeal and visual image about a particular brand. Deborah (2016)

conducted a research on the effect of branding on organizational performance in the retailing of

pharmaceutical products and the mediating role of customers. It was revealed that branding had a

positive significant effect on organizational performance. Kim et al., (2003) conducted a research

on the effect of consumer-based brand equity on firm‟s financial performance. It was established

that brand loyalty, awareness and image had a significant positive effect on profitability whereas

brand quality had a negative effect on financial performance.

Similarly, Musibau et al, (2014) conducted a study on the effect of sales promotion and product

branding on company performance. The study sampled 60 employees. Data was collected using

survey questionnaires. Data was analyzed using chi-square. It was revealed that product branding

and sales promotion affect organizational growth. In addition, Kalemb (2015) investigated on the

contribution of branding in enhancing performance of tourism sector in Rwanda. Findings

revealed that there was a relationship between branding and tourism performance in Rwanda.

Wed (2016) carried out a study on the influence of brand identity on customer loyalty and sales

performance in local companies. It was revealed that brand identity had an influence on the

customers‟ loyalty and the sales performance.

Furthermore, Omotayo and Adegbuyi (2015) carried out a study strategic roles of branding on

organization sales performance. The study used a survey method. Structured questionnaires were

used to collect data from150 respondents. The results revealed that branding had a significant

influence on sales performance. Additionally, Christian et al., (2019) carried out a study on brand

awareness in business markets and effect on company performance. The results revealed that

brand awareness significantly affected market performance. Likewise, Wang et al., (2018)

investigated on the effect of knowledge management and brand equity on marketing

performance. Convenience sampling was used to select sample of 291 respondents. The study

revealed that brand equity had a significant effect on marketing performance.

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Koh et al., (2019) carried out a study on the effect of brand recognition and brand reputation on

firm performance at U.S. based multinational restaurant companies. It was recognized that brand

reputation had a significant effect on a firm‟s value performance. Park et al., (2018) carried out a

similar study on the role of brand logos on firm performance. It was discovered that brand logo

significantly affected firm‟s performance. In the same way, Tsai et al., (2010) carried out a study

on the association between customer-based casino brand equity and firm performance. It was

shown that customer-based casino brand equity had influenced firm performance significantly.

However, a study done by Mei (2013) on brand identity, brand equity, and Performance showed

that brand equity; brand loyalty, perceived quality, and brand awareness did not have a positive

influence on an organization‟s performance.

2.3.1.2 The Effect of Price on Sales Performance

According to Kotler (2007), price is a cost of producing, delivering and promoting the product

charged. On the other hand, According pricing is understood as the process where an

organization determines what it will receive in exchange for its product after factoring in

manufacturing costs, market place, competition, market condition and quality of product.

According to Anderson et al., (2013), companies use pricing strategies such as; premium pricing,

value pricing, penetration pricing, cost plus pricing, competitive pricing, price skimming, going

rate pricing, geographical pricing, segmented pricing, product mix pricing, psychological pricing

and discriminatory pricing. Odhiambo (2013) researched on effect of pricing as a competitive

strategy on sales performance of pharmaceutical companies. It was established that pricing

strategy and decision has a significant effect on sales performance.

According to Nagle and Singlton (2017), value-based pricing is the process of setting price based

on customer perceived value of a product or service. Piercy et al., (2019) in their study found that

value-based pricing is the most profitable pricing strategy. This is because value-based pricing is

the price of a customer‟s next best alternative plus the value of differentiating features. Value-

based pricing is product driven and price is based on perceived product value (Nahring, 2011).

Value-based pricing is set by considering the value a product or service has on its target

customers. In other words, it is setting a price in relation to an offering‟s value (Nahring, 2011).

Deonir et al., (2017) conducted a research on pricing strategies and their impact on corporate

profitability. It was revealed that value-based pricing had a positive effect on profitability of an

19

organization. Liozu (2013) conducted a research on pricing orientation, pricing capabilities, and

firm performance. It was established that there was a positive relationship between value-based

pricing and firm performance. Andreas (2018) conducted a research on customer value-based

pricing strategies and why companies resist it by adopting a two-stage empirical approach. It was

revealed that deficits in value assessment; deficits in value communication; lack of effective

market segmentation; deficits in sales force management; and lack of support from senior

management are obstacles that hinder implementation of value-based pricing strategy. Füreder et

al., (2014) conducted a research on value-based pricing in Austrian medium-sized companies. It

was revealed that use of value based pricing enables a affirm generate more returns and create a

competitive advantage.

Similarly, Sije and Oloko (2013), explain that penetration pricing strategy is the process of

charging a low price to product or services hence penetrate the market. Sije and Oloko (2013)

noted that penetration pricing is used to support the launch of a new product, and when a product

enters a market with relatively little product differentiation and where demand is price elastic.

Spann et al., (2014) further expounds that penetration pricing is a technique of setting a low price

on a new product hence attracting customers to try company‟s products and services. Penetration

pricing is used when price of demanded product is at a level that will enable an organization

increase sales volume (Spann et al., 2014). For instance, De Toni et al., (2017) in their study

found out that higher sales volume leads to low unit costs and higher profits in the long run. The

study concluded that organizations price their products at a lower price assuming that the market

is price sensitive and that many companies price their products higher to “skim” the market.

Perminus and Wilson (2017) researched on effect of penetration pricing strategy on the

profitability of insurance firms in Kenya and found out that there was a positive relationship

between penetration pricing and firm profitability. According to Harmon and Raffo (2017),

penetration pricing is used by firms to increase their market share or sales volume. Firms also

use penetration pricing to speed up product adoption and as a competitive pricing strategy to

increase sales and reach a wider market share. For example, Njomo and Margaret (2016) carried

out a study on market penetration strategies and organizational growth among soft drink

companies and found out a significant and positive relationship between the variables. The study

concluded that penetration pricing leads to increase in sales volume and market share.

20

According to Matan (2016), organizations use penetration pricing strategy to price their products

or services lower than its normal price. Through this, an organization is able to gain market

acceptance, increase its market shares or discourage new competitors from entering the market.

Marn et al., (2003), postulated that use of very low price will make companies forego the

potential revenues and give customers a perception that the product is of low quality hence

making it difficult for companies to increase price of a product. In addition, products or services

charged very low makes it difficult for products to takeoff in the market (Golder & Tellis, 2004).

Mwaawaaru (2019) opines that price promotions include money-off coupons, pence-off flashes,

buy one get one free and extra fill packs. In addition, nowadays, price sensitive customers are

more aware of promotional activities and more active in searching for price promotional offers.

According to Zoellner and Schaefers (2015), price promotions have a strong effect towards

customers. It influences customers to buy one particular brand instead of another and to also

purchase it in greater quantities. On the other hand, Wang‟ondu (2016) speaks out that price

discount is the process of offering customer products at a reduced price from regular price of a

product. The author points out that price discount is used by organizations to induce product trial

and repeat purchases by new and current customers.

In order to substantiate the effect of price promotion strategies on sales performance, Bingqun et

al., (2016) carried out a study and found out that price promotion strategies affect sales

performance. Furthermore, Ajan (2015) conducted a research on effects of sales promotion on

purchasing decision of customer in Baskin Robbins Ice Cream Franchise in Thailand. The study

targeted customers in Bngkok and greater Bangkok area. The results revealed that price discount,

free sample and in store display influence product trial. Additionally, Burkow (2014) carried out

a study on evaluating temporary retail price discounts on sales performance, the results revealed

that price discounts increases sales performance.

2.3.1.3 The Effect of Place on Sales Performance

Place refers to distribution or the methods and location you use for your products or services to

be easily accessible to the target customers (Dang, 2014). Place strategy in marketing

incorporates the distribution by which a company puts its products and services in front of the

consumers. According to Harsono (2017), place strategy plays a fundamental role in the

marketing mix of a product or service. Place strategy outlines how and where a company will

21

place its products and services in an attempt to gain market share and consumer purchases. This

component of the 4Ps is sometimes referred to as the distribution strategy and may include

stores, both physical and online, and any other means by which the company can reach

customers (Harsono, 2017).

In addition, distribution channel is defined as a set of interdependent organizations involved in

the process of making a product or service available for consumption or use (Gorchels et al.,

2004). Distribution channel can also include physical movement, warehousing, ownership of the

product, presale transaction, post-sale activities; order processing, credit and collections; and

other different types of support activities (Ndungu'u, 2012). Distribution is the process of making

a product or service available for use or consumption by a consumer or business user, using

direct means, or using indirect means with intermediaries. Schoviah (2018) carried out a study on

the effect of marketing distribution channel strategies on a firm‟s performance among

Commercial Banks in Kenya. The study found out that marketing distribution strategies

increased sales, market share and profits.

Furthermore, Nashwan (2015) investigated on how marketing strategy influence firm

performance. The results indicated that distribution, promotion, pricing, and product

standardization and adaptation have an impact on sales, customer and financial performance of

firms. Similarly, Revino et al., (2015) in their study on the effect of distribution channel on sales

volume in Pt.Varia Indah Paramitha Manado found out that distribution channels had a positive

and significant impact on sales volume. Likewise, Ferri et al, (2017) made an investigation on

the effect of distribution channel innovation on the performance of Small and Medium

Enterprises. The results revealed that innovation in assortment; information sharing and

transportation coordination had positive and significant relationships with firm performance.

Additionally, Laswai (2017) carried out a study on the effectiveness of channels of distribution

models in the sales performance of an organization. The results indicated that distribution

channel had a positive influence on sales performance. Moreover, Chege et al., (2014)

investigated the effect of marketing capabilities and distribution strategy on sales performance of

MSP intermediary organizations‟ in Nairobi County, Kenya. The results of the study showed that

marketing capabilities and choice of distribution strategy significantly influences sales

performance.

22

In addition, Afzal (2019) investigated the distribution strategy and business performance in

emerging markets of Pakistan and found out that distribution strategy has an effect on business

performance. Also, Oladun (2012) carried out a study on innovative distribution strategies and

performance of multinational corporations (MNCs) and domestic manufacturing firms in

Nigeria. The results of the study showed that innovative distribution strategies have a significant

effect on performance.

According to Schiele (2018), geographic location has a significant influence on firm‟s profit

margin and success. This might be due to availability and proximity of raw materials and labor,

proximity to customers and competitors, infrastructure and transportation costs. Nguyen,

Morrison et al., (2011) conducted a research on geographic location, ownership and profitability

of Washington log trucking companies. The research used data from an extensive 2007 log

trucking survey. The study found out that ownership and geographic location has a positive

effect on profitability of the log trucking firm. In addition, firms anchored in clusters to form

focal points can achieve, on average, higher productivity than isolated business organizations and

consequently they can be more profitable (Nguyen et al., 2011).

According to Taylor (2018), businesses located in urban areas generate greater returns than those

located in rural areas. Paulin et al., (2018) noted that geographic location plays a big role in

survival of an organization. Edidijus and Per Von (2015) researched on the role of clusters in

innovation and performance of Small and Medium sized Technology Enterprises in Europe. It

was established that there was a positive relationship between geographical proximity between

firms and performance. Eze et al., (2015) conducted a research on the correlation between

business location and consumers patronage. The study used a survey design. 100 respondents

were sampled. Data was collected using structured questionnaire. The results indicated that

business location has a significant effect on business performance. The study concluded that

proximity of the business to customers influences repeat purchase.

According to Kotler and Armstrong (2012), retailers should be located near their target

customers thus ensuring accessibility. Retail stores located far away from their customers have a

negative effect on their purchase intention. It reduces frequency of customers visiting a store.

Krüger et al., (2011) conducted a research on location decision strategies for improving SME

business performance. The study targeted SMEs in the Nelson Mandela Metropole. The results

23

of the study indicated that there was a positive relationship between location and business

performance.

2.3.1.4 The Effect of Promotion on Sales Performance

Promotion strategy is the use of advertising, sales promotion, personal selling, public relations,

and direct marketing to promote organizational products (Muchiri, 2016). According to

Brrassington and Pettitt (2000), promotion is a direct way in which companies communicate

their products or services to their target customers. Kotler and Armstrong (2008) assert that

promotion is all activities undertaken to communicate and promote products or services to the

target market. According to Kotler (1999), promotional mix includes advertising, sales

promotions, personal selling and publicity. Kamba (2019) carried out a study on effectiveness of

promotion mix methods on sales in local pharmaceutical manufacturing companies in Kenya. It

was revealed that marketing managers should determine what combination of promotion mix

will make effective promotion programs hence increase in sales.

Aliata et al., (2018) carried out a study on the influence of promotional strategies on banks

performance. It was revealed that there was a positive relationship between promotional

strategies and bank performance. However, a research conducted by Oyewale (2013) on impacts

of marketing strategy on business performance revealed that promotion has no positive

significant effect on business performance.

According to Abiodium (2019), advertising is a non-personal paid form of communication about

an organization or its product to a target audience through amass broadcast medium by an

identified sponsor. Adewale (2017) state that advertising is a non-personal communication

strategy that is directed at target audience through various media in order to present and promote

products, services and ideas. On the other hand Adeleye (2018) postulates that advertising is a

strategy used by organizations to inform, remind and persuade customers to purchase a product.

It is also used to present product, ideas and reach targeted customers. Ashkan (2016) carried out

a study on the role of advertisement in sales increase and promotion in Hamadan Province

Insurance Companies. It was revealed that advertising has an impact on sales increase.

24

According to Olusegun (2016), advertising is used to inform customers about an existing product

or new product, maintain sales, attract new customers, introduce new packages and achieve a

competitive advantage. Akanbi and Adeyeye (2018) carried out a study on the association

between advertising and sales volume in Nigerian Bottling Company Plc Akanbi. It was found

out that a positive and significant correlation existed between advertising and the sales of the

company. In the same way, Agbeja et al., (2015) investigated on the effect of advertising on sales

and profitability of company. The study revealed that there was a significant effect between

advertising and profitability. Gan (2019) carried out a study on advertising effects on firm

performance in the Malaysian consumer products sector. It was established that there was a

positive relationship between advertising and firm performance.

Njawa (2015) conducted an investigation on the effects of advertising on organizational

performance in Tigo telecommunication network junior. The results indicated that advertising

has a significant influence on organizational performance. Dauda (2015) carried out a study on

the effect of advertising on the sales revenue and profitability of selected food and beverages

firms in Nigeria. It was fund out that there was a positive and significant relationship between

advertising and firm profitability. However, that study also revealed that there was no positive

significant relationship between advertising expenses and sales revenue of the companies. It was

recommended that the organization should not only concentrate on advertising to increase sales

revenue and firm profitability but that they should also use sales promotion, personal selling,

publicity.

Furthermore, Liban (2015) researched on the impact of advertisement on sales in

telecommunication companies in Somalia and found that advertising had a significant impact on

the sales volume. In addition Joshi et al., (2016) researched on the impact of advertising and

sales performance of Indian Telecommunication Companies. It was revealed that there exists a

significant positive relationship between advertising and sales performance. Nana et al., (2011)

conducted a research on the effect of marketing communications on the sales performance of

Ghana Telecom (Vodafone, Ghana). The study indicated that there was a strong relationship

between sales promotion, advertising budgets and total sales.

Kotler and Armstrong (2013) posit that another way of using promotion marketing strategy is by

the use of direct marketing. According to Magunga (2010) direct marketing is a direct

25

communication strategy used by organizations to target their customers thus get an immediate

response. It includes a face to face interaction or direct mail (Kotler, 2000). Direct mail is the

process of sending information about special offer, product, sale announcement, service reminder

to target customers. It includes telemarketing, email marketing, catalogue, brochures, newsletters

and online marketing (Berry & Wilson, 2004)). Through direct marketing an organization is able

to collect relevant information about their customers and develop products based on their

customers‟ needs and wants (Lawson, 2008).

Wisdom (2015) conducted study on the impact of e-marketing on business performance. The

study indicated that use of e-marking has a positive influence on performance. Mukorombindo

(2014) carried out a study on the impact of direct marketing on sales performance at seed potato

co-op. The results revealed that there was a weak relationship between direct marketing, and

sales performance. This is due to lack of formal marketing plan, lack of customer data base, lack

of market budget and poor communication. It was recommended that the company should use

several direct marketing strategies. Afande (2015) conducted a research on the effect of

promotional mix elements on sales volume of financial institutions in Kenya at Kenya Post

Office Savings Bank. It was revealed that sales promotion has the most effect on sales volume

followed by personal selling, public relation then direct marketing which had the least effect on

sales marketing.

Hiroki and Ashok (2019) conducted a research on use of direct marketing strategies by farmers

and their impact on farm business income. The results indicated that direct marketing does not

have an impact on farm business income. Aliata et al., (2018) carried out an investigation on the

effect of promotional strategies on banks performance. Descriptive research was conducted.

Simple random sampling technique was used to select 88% of bank branches. Questionnaires

were used to collect data. It was revealed that there was a positive relationship between

promotional strategies; direct marketing, sales promotion, personal selling, advertising and viral

marketing on expenditure and bank performance. Cheruiyot and Peter (2016) conducted a

research on Integrated Marketing Communication and Performance of Kenya Post and Savings

Bank. The study found out that direct marketing advertising, personal selling, sales promotion

and public relations enhance the company‟s performance by enhancing customer attraction,

customer loyalty, sales volumes, branch expansion and reminding customers.

26

Furthermore, Sales promotion is a strategy that is used by companies to promote sales, usage or

trial of a product or service. Organizations use sales promotion along with advertising, public

relations, and personal selling (Schiffman & Kanuk, 2004). Sales promotion is also used by

organizations to achieve a competitive advantage and influence their target customers to

purchase their products (Aderemi, 2003). Sales promotion is a media or non-media marketing

strategy used by organizational for a specific period of time to increase demand, productivity and

influence product trial. Oyedepo et al (2012) noted that sales promotion is an uninterrupted

incentive that offers an extra value or incentive for the product to the sales force, distributor, or

the final consumer with main objective of creating an immediate sale.

According to Mullin (2010), sales promotion is used by organizations to increase sales volume,

induce trial, increase repeat purchase, increase customer loyalty, increase product usage, create

interest, create awareness and create brand awareness. According to American Marketing

Association (2010), sales promotions is a media and non-media marketing pressures applied for a

predetermined time frame to different target audience, thus consumers, retailers and wholesalers

in order to stimulate trial, increase consumer demand and improve product viability. According

to Kotler (2003), sales promotion is a key ingredient in marketing campaigns and consists of a

diverse collection of incentive tools such as; coupons, rebates, samples and sweepstakes. It is a

short term strategy designed to stimulate quicker or greater purchase particular products or

services by consumers. According to research done by De Run and Jee, (2008), it was revealed

that use of sales promotion strategies will enable retailers and manufactures to attract more

customers and encourage them to try their products and services hence achieve their objectives.

Furthermore, Festus (2016) conducted a study on the impact of sales promotion on

organizational performance in Ghana Breweries Limited. It was revealed that there was a

positive and significant relationship between sales promotion and performance. Similarly,

Tandoh and Sarpong (2015) carried out an investigation on the impact of sales promotions on the

performance of Auto-Mobile Industries in Ghana. It was established that sales promotion has a

positive effect on organizational performance. Additionally, Dangaiso (2014) conducted a study

on the effects of sales promotion strategies on company performance of Auto-Mobile Industries

in Ghana, it was revealed that the use of sales promotional activities such; as bonuses, price and

contest sweepstakes has a positive influence on company performance.

27

Ibojo and Ogunsiji (2019) conducted a study on the effect of sales promotion as a tool on

organizational performance and found out that sales promotion has a positive effect on

organizational performance and sales volume of the organization. Syeda et al., (2018) conducted

a study on the impact of sales promotion on organizations‟ profitability and consumer‟s

perception in Pakistan. The study found out that sales promotion has a positive effect on brand

loyalty hence increase in organizational profitability. Furthermore, Adeniran (2016) carried out a

study on the effect of sales promotions on sales turnover in airlines industry in Nigeria. It was

established that sales promotions incentives has a positive impact on sales turnover in the airlines

industry. Osogbo (2014) conducted a research on effects of advertising on organizational

profitability. The study revealed that advertising has an effect on organizational profitability.

2.3.2 Sales Performance

As businesses grow more optimistic about opportunities for growth, the pressure is on for sales

organizations to meet ever-higher revenue targets. For these reasons, optimizing sales

performance in economy calls for a more rigorous and data-driven approach to foundational

sales processes, including strategic planning, territory allocation, resource planning and

compensation programming. Performance can be defined as the extent of actual work performed

by an individual or to what extent the actual work is shown by an individual (Richard, 2009). In

an era of intensifying competition and fierce negotiations with buyers, tactical selling approaches

simply don‟t work. The key to sales success is creating value the buyer is not currently

considering in their decision making.

Sales performance has been conceptualized to include both the outcome and behavioral

dimensions. Sales outcomes have always been seen by performance oriented sales people as

evidence to their behavioral performance and consequently a positive relationship has been

found to exist between job involvement component of commitment and sales performance. In

other words, committed sales people are expected to extend greater efforts on the job there by

having a direct effect on job performance (Silva, 2016). Richard (2009) defines performance

measures as the vital signs of the organization, which “quantify how well the activities within a

process or the outputs of a process achieve a specified goal”.

Performance measures help us understand, manage and improve what our organizations do.

Effective performance measures can let us know, how well we are doing, if we are meeting our

28

goals, if our customers are satisfied, if our processes are in statistical control, and if and where

improvements are necessary

2.3.2.1 Sales volume

Sales volume is the number of units sold within a reporting period (Ajagbe et al., 2015). This

figure is monitored by investors to see if a business is expanding or contracting. Within a

commercial bank, sales volume may be monitored at the level of the product, product line,

customer, subsidiary, or sales region. This information may be used to alter the investments

targeted at any of these areas. According to Adekoya (2011), a business may also monitor its

break even sales volume, which is the number of units it must sell in order to earn a profit of

zero. The concept is useful when sales are contracting, so that management can determine when

it should implement cost reductions. This can be a difficult concept to employ when there are

many different products, and especially when each product has a different contribution margin

(Iqbal et al., 2013).

According to Guesh (2010), the sales volume concept can be applied to services. For example,

the sales volume of a consulting firm may be considered the total number of hours billed in a

month. On the other hand, Soltani and Davanloo (2016) uphold that sales volume equals the

quantity of items a business sells during a given period, such as a year or fiscal quarter. Abah and

Olohiliye (2015) stress that sales volume indicate the quantity of different stock keeping units

sold or the number of customers who have sought for the services offered by a firm in a given

time period such a year or a fiscal quarter. Sales volume measurement is a vital part of the

performance evaluation of the sales force who are responsible for selling the products of the firm

(Abah & Olohiliye, 2015). Generally, sales representatives are incentivized on the basis of their

ability to meet their target. Since, a major part of the variable pay component depends on

achieving the target, sales volume is an important metric in sales and marketing among

commercial banks (Abah & Olohiliye, 2015).

According to Quarshie (2010), increased sales volume helps company to acquire healthy

revenue. Increased quantity sales mean increased production hence that also helps in increased

contribution margin. Moreover, increased sales volume helps to reach break-even earlier which

helps the company gain profits from their operation as early as possible (Quarshie, 2010). The

29

marketing relationship of costs and sales volume as profits helps a business to examine selling

prices, sales, production volumes, expenses, costs and profits. This analysis provides the

business with useful information that it can use for decision-making processes. According to

Frimpong (2016), the demand for a product will greatly influence the sales volume of the

product. The basic pricing strategy for a product attempts to maximize sales volume and profit.

This requires that a commercial bank must find the right price that will allow the product to sell

while allowing it to adequately profit from the sale (Pembi et al., 2017). Under a basic pricing

strategy, if the sales volume of a product is too low, the business will generally lower the price

point to increase sales. This will, however, also result in a reduced profit on the item for the

business. In many cases, lowering the price of a product will result in a higher sales volume

(Ajagbe et al., 2015).

2.3.2.3 Profitability

Profitability is the ability of a business to earn a profit (Wahlberg, 2017). Profitability is ability

of a company to use its resources to generate revenues in excess of its expenses. In other words,

this is a company‟s capability of generating profits from its operations (Pustelnik & Hallberg,

2013). Profitability is the primary goal of all business ventures. Asimakopoulos et al., (2013)

explains that without profitability a banking institution will not survive in the long run. So

measuring current and past profitability and projecting future profitability is very important.

Stierwald (2010) contends that profitability is one of the four building blocks for

analyzing financial statements and company performance as a whole. The other three are

efficiency, solvency, and market prospects. Investors, creditors, and managers use these key

concepts to analyze how well a company is doing and the future potential it could have if

operations were managed properly (Stierwald, 2010).

According to Gituma (2017), the two key aspects of profitability are revenues and expenses.

Revenues are the business income. This is the amount of money earned from customers by

selling products or providing services. Generating income is not free, however Gituma (2017)

maintains that businesses must use their resources in order to produce these products and provide

these services. Al-Nimer and Yousef (2015) reason that resources, like cash, are used to pay for

expenses like employee payroll, rent, utilities, and other necessities in the production process.

Therefore profitability looks at the relationship between the revenues and expenses to see how

30

well a company is performing and the future potential growth a company might have (Al-Nimer

& Yousef, 2015).

Profitability is measured by an income statement that maintains a record of income and expenses

over an interval of time (Adefulu, 2015). Businesses cannot survive without profitability, and a

highly profitable business rewards its owners with a considerable return on their investment.

According to Adefulu (2015), business managers are responsible for increasing a firm‟s

profitability, by subjecting each process under scrutiny, the aim is to point out changes that

improve profitability. These changes can be examined with pro forma income statement, also

referred to as, Partial Budget, allowing one to analyze the impact of these modifications on

profitability, before implementing it (Asimakopoulos et al., 2013).

According to Fitzsimmons et al., (2015), different decision tools or profitability ratios can be

employed to evaluate a bank‟s profitability. The tools include among others, profit margin, return

on assets and return on equity. According to Meriläinen (2015) profit margin is expressed in

percentage and can be assessed by dividing net income by revenue. Net income or net profit is

the remaining amount after subtracting company expenses from total revenue. Gross profit

margin, pre-tax profit margin, net margin, operating margin are different kinds of profit margins

commonly used during evaluation. Andersson and Wachtmeister (2016) claim that though it is

quite helpful in comparing the profitability of two different companies, it is necessary that both

these organizations have to be from the same industry, containing similar business models and

demonstrating the same revenue. A comparison otherwise would be inaccurate, and therefore,

redundant. In the case of companies that are losing money, the profit margin is inconsequential

as they are not generating any profit (Alharthi, 2016).

According to Baten and Kamil (2017), return on assets (ROA), also known as return on

investment (ROI), acts as an indicator of company profitability in relation to its total assets. It

reveals how efficient the management is in employing resources to its full potential, to generate

profit. ROA is denoted as a percentage and is calculated by dividing an organization‟s annual

earnings by its total assets (Akhmedjonov & Balci, 2015). In the case of public companies, ROA

varies significantly as they are quite dependent on the industry. Therefore, ROA, when used to

compare company profitability should be evaluated against past ROA numbers or ROA of an

31

analogous company. Higher ROA is the preferable result as it denotes that the business is

generating more revenue on less investment (Chavarin, 2016).

On the other hand, Return on Equity (ROE) is the ratio that assesses revenue generated by a

company in relation to investments made by equity holders (Alarcon & Sanchez, 2013). It is also

denoted as a percentage and measures a company‟s efficiency, indicating its capacity to generate

profit without much investment (Mungal, 2015). A higher ROE is a measurement of

management efficiency when utilizing investment. One should be aware that decrease in value of

shareholder‟s equity, for instance, write-downs or share buy-backs, boosts ROE number

mechanically. The same thing can be observed in cases of high debt. Therefore, to get accurate

ROE, comparisons should be made within the same industry, and evaluation (high or low) should

be achieved under the same context (Cardesjo & Lind, 2011).

2.4 Empirical Studies

A study by Gituma (2017) determined the effects of marketing mix on sales performance.

Descriptive and inferential statistics was used to analyze data. The study revealed that product

quality has a positive impact on sales performance, brand awareness influences organizational

performance, packaging is used to describe the product, brand image, and loyalty influences

company‟s profitability and pricing strategy increases sales volume. In addition, store design and

use of attractive stimuli such as music has an influence has a positive effect on consumer

purchase and sales volume, and geographic location and has a significant influence on

profitability, advertising, direct marketing and increases sales volume.

Muthengi (2017) conducted a study on the effects of marketing strategies on sales performance

of commercial banks in Kenya. The target population was the 43 commercial banks registered by

the Central Bank of Kenya. The researcher collected data using semi structured questionnaires.

The findings in this study showed an overall significance of the marketing variables adopted,

although not much effect was seen when a marketing variable was compared with bank

performance in isolation of other variables. This helped to conclude that the marketing strategies

techniques must be adequately combined in order to bring about improved performance. For

example, if a bank should engage in promotional activities without adequate knowledge of the

market, the aim of marketing will be defeated.

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Kasiso (2017) conducted a study sought to establish the effects of marketing strategies on sales

performance of small and medium enterprises in Kenya. The study adopted a descriptive

research survey design. The study collected primary data using questionnaires. Data analysis

was done using Statistical Package for Social Sciences (SPSS version 21.0). The study

found out that considerable number of SMEs in Nairobi had adopted product development

strategies which resulted to a positive significant effect on the sales performance of small and

medium enterprises in Kenya. Pricing strategies too had a positive significant effect on the sales

performance of small and medium enterprises in Kenya. Similarly, promotional strategies had a

positive significant effect on the sales performance of small and medium enterprises in Kenya.

Furthermore, place strategies had a positive significant effect on the sales performance of small

and medium enterprises in Kenya. The study recommended that SMEs in Kenya should

continually embrace produce development strategy as this strategy provided a framework for

creating new products or improving the performance, cost or quality of existing products.

Ardjouman and Asma (2015) explored marketing management strategies adopted by small and

medium enterprises in Cote d‟Ivoire to improve their performances and established that

there is a high level of awareness of the significant roles played by marketing management

strategies in the performance of small and medium enterprises.

Pourhosseini and Zohre (2013) conducted a study to identify performance implications of

marketing strategy and moderating effects of transformational leadership, demand uncertainty

and competitive intensity on sales performance. The study was a mixed research that combined

qualitative and quantitative methods. The population entailed sales and marketing managers of

companies in food industries that were members of Tehran stock exchange. The sample size in

qualitative and quantitative study was 23 and 66 respectively. Analyses of survey and secondary

data provided evidence that marketing strategy had a positive and meaningful relationship on

sales performance while transformational leadership and competitive intensity were found to

exert moderating effects on this relationship.

Kiprotich (2018) did a study on effects of 4ps marketing mix on sales performance of automotive

fuels of selected service stations in Nakuru town. The research employed the research design

called questionnaire design. The oil marketers‟ performance is significantly influenced by the 4

33

ps. Each of the elements however carries a unique contribution to sales performance of

automotive fuels in the selected stations in Nakuru town.

Farshid (2011) looked at the influence of export marketing strategy determinants on firm export

performance between 1993-2010. They used the questionnaire research design. They discovered

that it is possible to design export marketing strategy determinants of export performance model,

which may help firm to focus on export marketing strategy elements as one of important

elements to enhance export performance in global markets.

On the other hand, Heiner and Mühlbacher (2010) studied Strategic marketing and business

performance in three European „engineering countries, they used the survey research design.

They found out that the key contradiction of the study is the low impact of market orientation on

financial performance, which is not assumed, as several previous studies propose the link to be

strongly positive. Also, this result is surprising in light of a recent, general development of

increased customer focus. Nevertheless, it is characteristic to market orientation that it also

contributes to the accumulation of other organizational resources and increases their value.

2.5 Literature Gap

A study by Gituma (2017) determined the effects of marketing mix on sales performance.

Marketing mix was measured using product quality, brand awareness, packaging, and brand

image, and sales performance was measured using profitability, hence presenting a content gap.

The current study closed the above gap by measuring marketing strategies using product, price,

place, and promotions; and sales promotions using sales volume and profitability.

Furthermore, Heiner and Mühlbacher (2010) studied strategic marketing and business

performance in three European „engineering countries. The above study presents a geographical

gap since the current study will be carried out in Burundi among the banking employees, and not

engineers.

Other studies by Muthengi (2017) and Kasiso (2017) have been done on the effects of marketing

strategies on sales performance of commercial banks in Kenya. The current study will look at the

commercial banks in Burundi hence closing a contextual gap.

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CHAPTER THREE

METHODOLOGY

3.0 Introduction

This chapter comprises of the research design, target population, sample size, sampling

technique, data sources, data collection methods, data collection instruments, validity and

reliability, data collection procedure, data analysis, ethical considerations, limitations of the

study.

3.1 Research Design

Research design is a framework that is used by researchers to conduct research. This research

framework includes the procedures as well as the procedural framework necessary for obtaining

the data and information needed to structure and solve a research problem (Zikmund, 2012). This

study employed a cross-sectional study design. A cross-sectional study involves looking at

people who differ on one key characteristic at one specific point in time. The data is collected at

the same time from people who are similar in other characteristics but different in a key factor of

interest such as age, income levels, or geographic location (Sekaran & Bougie 2013). This

method is often used to make inferences about possible relationships or to gather preliminary

data to support further research. This study preferred cross-sectional design because it is usually

relatively inexpensive and allow researchers to collect a great deal of information quite quickly.

Data is often obtained using self-report surveys and researchers are then able to amass large

amounts of information from a large pool of participants (Shajahan, 2008). Furthermore, the

study used quantitative approach to gain better knowledge and understanding of the results.

Quantitative research relies on deductive reasoning with the help of questionnaires (Sekaran &

Bougie, 2010). In addition, the study supplemented quantitative approach using qualitative

approach where the use of key informant interviews was employed.

3.2 Target Population

The study targeted employees from the sales and marketing departments of the selected banks

because they were considered more informed of the study topic (i.e. marketing strategies and

sales performance). The researcher used systematic sampling to select target population of 337

35

staff from the selected commercial banks (Human Resource Annual Reports (2017) for IBB,

BANCOBU, BBCI and BCB). The sampled employees included departmental

managers/supervisors, and operational staff.

3.3 Sample Size

3.3.1 Quantitative Sample Size

Sample size is a smaller set of the larger population (Cooper & Schindler, 2014). The authors

argued that if well in the, a sample of between 10-30% of the population is adequate for

generalization of findings to the whole population. In the study, sample was determined using

Slovene‟s formula.

Where n=sample size; N=target population; α=level of significance at 0.05.

Table 3.1 gives the summary of the target population and sample size distribution as indicated

below.

36

Table: 3.1: Target Population and Sample Size Distribution

Bank Name Target

population

Sample size

Category of respondents Operational staff

Interbank Burundi (IBB) 93 51

Banque Commerciale du Burundi

(BANCOBU)

85 46

Burundi Bank of Commerce and

Investment (BBCI)

72 39

Burundi Bank of Credit (BCB) 87 47

Total 337 183

Source: Human Resource Annual Reports (2017) for IBB, BANCOBU, BBCI, and BCB

3.3.2 Qualitative Sample Size

This was derived from the managerial staff from the ten the commercial banks in Bujumbura.

Table: 3.2: Qualitative Sample Size

Banks Sample Size

Category of informants Department

manager

Interbank Burundi (IBB) 1

Banque Commerciale du Burundi (BANCOBU) 1

Burundi Bank of Commerce and Investment (BBCI) 1

Burundi Bank of Credit (BCB) 1

Total 4

Source: Human Resource Annual Reports (2017)

3.4 Sampling Technique

The researcher used simple random sampling to select the middle level staff. The entire process

of sampling was done in a single step with each subject in the independently of the other

members of the population. The researcher achieved this by writing the names of all the

respondents obtained from human resource departments in different pieces of papers. The names

of the respondents were then put in a big dish and shaken to ensure random mixture. The names

were randomly in the one at a time until a complete number of respondents were arrived at. This

37

method was preferred because of its non-biasness and inclusiveness. It gives every respondent

equal opportunity to participate in the study without any special considerations.

The purposive technique was used to select the managerial staff. This is because this category of

participants is considered more informed about the research topic and therefore would provide

relevant and in-depth information. Saunders, et al., (2012) posits that purposive sampling permits

the selection of a sample with bias to warrant inclusion of those informants who are most

suitable in providing important information to the study.

3.5 Data Source

This study was based on only primary source of data collection. This is because primary data are

likely to be more up-to-date than data obtained from published source.

3.5.1 Primary Source

The primary source was collected using questionnaires and Interviews.

3.6 Data Collection Methods

The study adopted survey questionnaires and interviews as the data collection methods.

3.6.1 Surveys

The study used survey method of data collection. The researcher preferred to use survey method

because it is good for gathering descriptive data, relatively easy to administer, cost effective and

time saving. This method was used to get information about marketing strategy and sales

performance departmental managers of the selected commercial banks in Bujumbura.

3.6.2 Interviews

The study also used key informant interviews where interview guides were distributed to the

managerial staff. The interview guide included the following main themes: marketing strategy

and sales performance. In the social sciences, interviews allow interviewers to study people in a

more natural setting than questionnaires (Mugenda & Mugenda, 2003).

3.7 Research Instruments

This study used questionnaires as its main research instrument and key informant interviews as

supplementary instrument.

38

3.7.1 Questionnaires

The researcher used closed ended questionnaires to collect data from the operational level staff

of the selected commercial banks in Bujumbura. The researcher preferred to use questionnaires

because large amounts of information can be collected from a large number of people in a short

period of time and in a relatively cost effective way. A five Likert scale was used to assess the

extent to which a respondent agree or disagree with a statement of an attitude, belief or

judgment; where 5=strongly agree, and 1=strongly disagree. The questionnaire was structured

into three sections; the first section captured information regarding the demographic

characteristics of the respondents in terms of gender, age, education level and work experience;

the second section captured information about marketing strategy which was measured using:

product (5 items), price (5 items), place (5 items), and promotion (7 items). The section captured

information regarding sales performance which was measured using sales volume (5 items) and

profitability (5 items)

3.7.2 Key Informant Interviews

This study employed structured face to face interviews to capture information about the

marketing strategy and sales performance from the departmental managers/supervisors of each of

the selected commercial banks in Bujumbura. The study employed interview guides which were

distributed during five working days of the week and the results were manually recorded using

pen and paper. The researcher preferred to use interview guides because they are useful for

obtaining detailed information about feelings, perceptions and opinions and respondents words

are recorded.

3.8 Validity and Reliability

This section contains information on how validity and reliability of the instrument were ensured.

3.8.1 Validity

Quantitative Data: This study used Content Validity Index (CVI) so as to establish the degree

to which a sample of items, taken together, constitutes an adequate operational definition of a

construct. According to Beck and Gable (2001), to examine the content validity, professional

subjective judgment is required to determine the extent to which the scale was designed to

measure a trait of interest. This is because content validity is a subjective judgment of experts

about the degree of relevant construct in an assessment instrument. However, inclusion of at least

39

five experts (mostly senior lecturers, associate professors, and professors) in that field or five to

ten experts would be useful to judge the content domains of a scale through use of rating scales

(Mugenda & Mugenda, 2003). The researcher achieved this by involving experts in the field of

human resource, specifically two (2) human resource managers from two commercial banks in

Kampala City. Their suggestions, expert opinions and recommendations were adjusted

accordingly and the following formula was used to substantiate it.

Where CVI=Content Validity Index

According to Amin (2005) if the CVI is ≥0.70, the items are considered valid; therefore, the

results of 0.91 index shows that the instrument was valid.

Qualitative Data: Validity under the qualitative model is exhaustively theorized into five

dimensions, that is, descriptive, interpretive, theoretical, generalizability and evaluative validity

although other dimensions are identified (Maxwell, 1992). However this study employed

interpretive validity. In order to ensure interpretive validity which resultantly enhances

trustfulness of the data, measure was taken to ensure that the interpretations reflect the

participants‟ perspectives, not the researcher‟s. The intention was to ensure that the participants‟

words and actions were interpreted rightly and without bias. To realize this, the data analysis was

exposed to an expert reviewer who was adequately knowledgeable about the subject matter and

context. This, in view of Saunders, et al., (2012), safeguards against a situation of "holistic

fallacy" where data or results have a habit of looking more patterned, consistent or similar than

they were and the tendency of the researcher to selectively note and record certain data at the

expense of other data.

3.8.2 Reliability

In order to ensure that the research instrument is reliable and can consistently produce reliable

data when administered, the researcher determined its reliability by measuring the internal

consistency of the instrument. This reliability analysis was conducted on the piloted survey

40

instruments prior to official data collection so as to ensure that the instruments provide reliable

data for the study. Test retest method of measuring reliability was used to conduct the pilot study

by the researcher to ensure that the instruments can provide consistent measurements. Five (5)

different samples (the middle level staff) from one commercial bank in Kampala City were in the

and the instruments were administered on them twice with a two weeks‟ interval, and the

obtained results were correlated using Pearson Linear Correlation Coefficient (PLCC).

According to Onen (2015), if the results of the pilot study are found to be consistent, the

instruments are assumed as reliable, otherwise not. Table 3.3 gives the summary of the pilot

study findings.

Table 3.3: Pearson Linear Correlation Coefficient

Variables correlated First pilot study Second pilot study

r-value Sig r-value Sig

Marketing Strategy Vs

Sales performance

0.71* 0.000 0.73* 0.001

*. Correlation is significant at the 0.05 level (2-tailed).

The results in table 3.2 shows that the r-value in the first pilot study was significant at 0.000 and

in the second study, it was significant at 0.001, hence a conclusion that there is consistency,

implying that the results are reliable

Furthermore, Cronbach‟s alpha was used in the actual study to determine the reliability of the

instruments. Cronbach‟s alpha measures the internal consistency that is, how closely related a set

of items are as a group. The higher the α-value, the more reliable the instruments were

considered. A commonly accepted rule for describing internal consistency using Cronbach‟s

alpha is as follows (Kline, 2000): table 3.4 gives the summary.

41

Table 3.4: Interpretation of Cronbach’s Alpha Results

Cronbach’s alpha Internal consistency

0.9 Excellent

0.9 > 0.8 Good

0.8 > 0.7 Acceptable

0.7 > 0.6 Questionable

0.6 > 0.5 Poor

0.5 > α Unacceptable

Table 3.5: Cronbach’s Results of the Pilot study

Variables tested Number of Items Cronbach’s alpha Interpretation

Marketing strategy 22 0.887 Good

Sales performance 10 0.857 Good

Overall 32 0.881 Good

The results of the findings from table 3.5 revealed Good and Acceptable reliability of the

instruments in the variables of marketing strategy and sales performance. It implies that majority

of the participants understood the questions and were able to interpret and answer it accordingly.

3.9 Data Gathering Procedure

An introduction letter was obtained from the College of Economics and Management of

Kampala International University, Uganda for the researcher to solicit approval to conduct the

study from the in the commercial banks in Bujumbura. During the administration of the research

instruments to the in the respondents; they were properly and adequately oriented on the study

and why it was being carried out. The respondents were requested to sign consent form. They

were also guided on how to fill the questionnaires, and the importance of answering every item

of the questionnaire without leaving any part unanswered. The respondents were requested to

kindly respond to the questionnaire on time. After retrieving them back, they were thoroughly

checked to ensure that all items were adequately answered by the respondents.

42

3.10 Data Analysis

Data analysis is the process where collected data is reduced to a more controllable and

convenient size, and a researcher can start to identify trends or patterns, apply statistical

techniques and give a summary of the data (Cooper & Schindler, 2006). Collected data was

sorted and coded. Statistical Package for Social Sciences (SPSS Vs, 22) was used to analyze

data. Descriptive and inferential research was used to analyze data. The researcher used

frequencies, mean, and standard deviations to analyze descriptive research. Infеrеntiаl statistics

is а technique used by researchers to study samples and make gеnеrаlizаtions about the

population (Zulfigar & Bala, 2016). The study analyzed inferential statistics using regression

analysis in order to determine the effect of product on sales performance; the effect of price on

sales performance; the effect of place on sales performance; and the effect of promotion on sales

performance. Multiple regression analysis was done to determine the variance of the predictor

variables on the dependent variable.

At a very basic level, the relationship between a continuous response variable (Y) and a

continuous explanatory variable (X) may be represented using a line of best-fit, where Y is

predicted, at least to some extent, by X. If this relationship is linear, it may be appropriately

represented mathematically using the straight line equation 'Y = α + βX'. In our study, sales

performance (SP) was predicted by marketing strategy (MS);

= α + + ………………………………………………. (I)

Objective one: To determine the effect of product on sales performance of in the commercial

banks in Bujumbura.

= α + + ………………………………………………. (II)

Objective two: To examine the effect of price on sales performance of in the commercial banks

in Bujumbura.

= α + + ………………………………………………. (III)

Objective three: To evaluate the effect of place on sales performance of in the commercial

banks in Bujumbura.

43

= α + + ………………………………………………. (IV)

Objective Four: To establish the effect of promotion on sales performance of in the commercial

banks, Bujumbura.

= α + + ………………………………………………. (IV)

Where; α=the value of SP when MS is equal to zero (also known as the intercept)

β= the slope of the line (also known as the regression coefficient)

The regression coefficient β describes the change in SP that is associated with a unit change in

MS.

Ɛ=Error Term [this is the error or disturbance term of an observed value which is a surrogate for

all the omitted variables in the regression model].

SP: Sale Performance

MS: Marketing Strategy

Pt: Product

Pr: Price

Pl: Place

Pm: Promotion

Decision Rule: The p-value was set at 0.05. If the p<0.05, the null hypothesis was rejected,

otherwise it was accepted. Furthermore, if the p<0.05, the effect of the IV on the DV was

considered significant, otherwise not.

Qualitative data was manually done by identification and transcription of recorded data into the

qualitative findings. There after analysis was conducted to identify categories and themes that

emerged from the data. The themes on each of the variables were coded and conceptually

organized, analyzed, evaluated and aligned to the researcher‟s objectives from which

interpretations was drawn, whereas the analysis of data was done concurrently with data

44

collection and the findings were used for further sampling, data collection, processing and

analysis (Mugenda & Mugenda, 2003).

3.11 Ethical Consideration

This study observed the following ethical considerations:

The researcher ensured quality and integrity by reporting only what she found in the field and

following a scientific and generalized report writing for academic research.

The researcher sought for informed consent from the respondents. This was done by requesting

the researcher to sign the informed consent form before participating in the study.

The researcher respected the confidentiality and anonymity of the research respondents by

involving them in the study in their own terms and place of convenience and coding their names

in the final report of the study.

The researcher ensured that participating in the study was voluntary. No one was coerced, forced

or bribed in order to be part of the study. The researcher also ensured voluntary withdrawal from

the study in case of change of mind by the respondent.

The researcher ensured that there was no harm to the participants in anyway. The study was done

in secure and well furnished rooms.

Last but not least, the researcher ensured that the final reporting was impartial and independent

of her personal opinion rather it was the opinion of the respondents that were used in the final

analysis of the research.

45

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.0 Introduction

This chapter presents the analysis of the data gathered and interpretation thereof. It gives the

demographic characteristics of the respondents and variables used.

4.1 Response Rate

The researcher had 183 respondents in total, however, 172 respondents participated successfully;

hence a participation rate of 94%. Amin (2004) believes that if the response rate is more than

70%, it signifies that the turn up of participants was good hence the data can be generalizable.

4.2 Demographic Characteristics of the Respondents

This section determines the demographic characteristics of the respondents. To achieve it,

questionnaires were distributed to capture these responses. Frequencies and percentage

distribution table was employed to summarize the demographic characteristics of the respondents

in terms of gender, age, education level, and work experience. Table 4.1 gives the summary of

the findings.

46

Table 4.1: Demographic Characteristics of the Respondents

Gender Frequency Percent (%)

Female 57 33.1

Male 115 66.9

Total 172 100.0

Age

20-29 21 12.2

30-39 48 27.9

40-49 99 57.6

50 years and above 4 2.3

Total 172 100.0

Education Level

Diploma 52 30.2

Degree 99 57.6

Masters 21 12.2

PhD 00 00.0

Total 172 100.0

Work Experience

1-5 years 22 12.8

6-10 years 62 36.0

More than 10 years 88 51.2

Total 172 100.0

Source: Primary data, 2018

The results presented in table 4.1 revealed that majority, 66.9% of the respondents were male,

while 33.1% were female. The dominance of the male respondents was attributed to the fact that

commercial banks prefer recruitment of men in technical jobs compared to the women.

Furthermore, majority, 57.6% of the respondents were within the age group of 40-49 years,

followed by 27.9% who were within the age group of 30-39 years, while the respondents within

the age group of 20-29 years and 50 years and above were represented by 12.2% and 2.3%

respectively. The dominance of the respondents within the age group of 40-49 years implies that

they are mature enough to stay and work for the company and reduce work turnover which

would imply seeking for better means of improving sales performance.

47

In addition, the results revealed that majority, 57.6% of the respondents were Bachelor Degree

holders, followed by 30.2% who were Diploma holders and 12.2% who were Masters Holders.

None of the respondents had a PhD. The dominance of the respondents with the Bachelor Degree

signifies that the banking institutions prefer to employ educated employees who understand the

importance of marketing strategy in scaling up sales performance.

Similarly, the study revealed that majority, 51.2% of the respondents had more than 10 years of

working experience, 36% of them had 6-10 years of experience while 12.8% had 1-5 years of

working experience. The dominance of the respondents with the working experience of more

than 10 years imply that the banking institutions prefer to recruit employees with high level of

experience in the industry for purposes of competitive advantage.

4.3 The Descriptive Statistics for Marketing Strategy

The independent variable which is marketing strategy was measured using product, price, place,

and promotions. The mean values were determined using the scores provided in the table below.

Furthermore, table 4.2 gives the summary of the mean values for marketing strategy.

Scale Mean Range Response Interpretation

5 4.21-5.00 Strongly agree Very Satisfactory

4 3.41-4.20 Agree Satisfactory

3 2.61-3.40 Not sure Fairly satisfactory

2 1.81-2.60 Disagree Unsatisfactory

1 1.00-1.80 Strongly disagree Very unsatisfactory

48

Table 4.2: Marketing Strategy

Marketing strategy Mean Std. Deviation Interpretation

Product

This bank‟s brand image has an influence on profitability. 3.96 .939 Satisfactory

This bank offers a broad product line. 3.92 .981 Satisfactory

This bank has products with a broad market appeal. 3.84 1.062 Satisfactory

This bank uses packaging strategy that influences consumer-

perceived product quality.

3.80 1.008 Satisfactory

This bank develops and tests its products to confirm their

adaptability and suitability to target customers.

3.23 1.121 Fairly

satisfactory

Average mean 3.75 1.022 Satisfactory

Price

This bank uses free samples and bonus packs to increase its

sales performance.

4.10 .953 Satisfactory

This bank uses pricing strategy to increase its sales volume. 4.09 .913 Satisfactory

This bank offers products which are lower in prices

compared to market segments.

3.94 1.058 Satisfactory

This bank uses penetration pricing to increase product

adoption.

3.93 1.046 Satisfactory

This bank uses price discount to influence its sales

performance.

3.88 1.002 Satisfactory

Average mean 3.99 0.994 Satisfactory

Place

This bank‟s exterior and interior appearance is appealing to

customers.

3.68 .822 Satisfactory

This bank uses attractive stimuli such as music to influence

its customers.

3.66 .833 Satisfactory

This bank is located in an area that increases its chance for

sales performance.

3.63 .780 Satisfactory

This bank‟s distribution channels influence its product

availability.

3.48 .827 Satisfactory

This bank is located in an area that is accessible to customers. 3.45 .951 Satisfactory

Average mean 3.58 0.843 Satisfactory

Promotion

This bank offers price discounts and coupons. 3.99 1.071 Satisfactory

This bank uses advertising to present its product and ideas. 3.69 1.137 Satisfactory

The use of direct marketing at this bank has led to an increase

in profit.

3.67 1.029 Satisfactory

Advertising has increased sales at this bank. 3.65 1.149 Satisfactory

The use of sales promotion has increased brand loyalty of

this bank.

3.20 1.144 Fairly

satisfactory

This bank advertises its products through various media

platforms.

3.15 1.289 Fairly

satisfactory

This bank uses personal selling and publicity to promote their

products

2.82 1.405 Fairly

satisfactory

Average mean 3.45 1.175 Satisfactory

Overall average mean 3.63 1.016 Satisfactory

Source: Primary data, 2018

49

The results presented in table 4.2 revealed that respondents assessed product which is a

determinant of marketing strategy as satisfactory (Average mean=3.75, Std=1.022). This was

attributed to the fact that majority of the respondents agreed that their banks‟ brand image have

influence on profitability (mean=3.96, Std=0.939). The respondents also agreed that their banks

offer a broad product line (mean=3.92, Std=0.981). In addition, respondents agreed that their

banks have products with a broad market appeal (mean=3.84, Std=1.062). Furthermore,

respondents agreed that their banks use packaging strategy that influence consumer-perceived

product quality (mean=3.80, Std=1.008). However, respondents were not in full agreement that

their banks develop and test their products to confirm their adaptability and suitability to target

customers (mean=3.23, Std=1.121).

The above responses imply that a commercial bank‟s product strategy is the way a firm competes

in the market and improve its total performance. This is because product strategy is the single

most important component of marketing strategy and is regarded as a blueprint for marketing

resources allocation toward realizing the objectives of the firm, which is sales, financial and

customer performance. To keep consistent performance, commercial banks must therefore

regularly adjust their marketing strategies to conform to changes in the markets with the aim of

enduring responsiveness to their operating marketplace. Thus far, product adaptation is a suitable

strategy toward market responsiveness as it offers the development of new products that meet the

needs of a changing marketplace.

Furthermore, table 4.2 revealed that price as a determinant of marketing strategy was assessed by

the respondents as satisfactory (average mean=3.99, Std=0.994). This was attributed to the fact

that majority of the respondents agreed that their banks use free samples and bonus packs to

increase their sales performance (mean=4.10, Std=0.953). Additionally, the respondents agreed

that their banks use pricing strategy to increase their sales volume (mean=4.09, Std=0.913).

Accordingly respondents agreed that their banks offer products which are lower in prices

compared to market segments (mean=3.94, Std=1.058). Similarly, respondents agreed that their

banks use penetration pricing to increase product adoption (mean=3.93, Std=1.046) and price

discount to influence their sales performance (mean=3.88, Std=1.002).

The above responses imply that the commercial banks do their best to promote their services and

products. They employ notably free samples, bonus packs, discounts, and penetration pricing so

50

as to be competitive in the market and increase the chances of improvement in sales

performance. Indeed an acceptable price change is determined by the buyer‟s willingness and

ability to purchase a product, and the bank‟s cost of producing and distributing the product. Over

the years, banks have also incorporated price discrimination in their services to attract different

classes of customers and accommodate all types of clients with their numerous products and

services so as to increase their sales performance.

Furthermore, the findings in table 4.2 revealed that place as a determinant of marketing strategy

was assessed by the respondents as satisfactory (average mean=3.58, Std=0.843). This was

attributed to the fact that majority of the respondents agreed that their banks‟ exterior and interior

appearance is appealing to customers (mean=3.68, Std=0.822). Other respondents agreed that

their banks use attractive stimuli such as music to influence their customers (mean=3.66,

Std=0.833). In addition, respondents agreed that their banks are located in areas that increase

their chance for sales performance (mean=3.63, Std=0.780). Similarly, respondents agreed that

their banks‟ distribution channels influence their product availability (mean=3.48, Std=0.827).

Additionally, respondents agreed that their banks are located in areas that are accessible to

customers (mean=3.45, Std=0.951).

The above responses signify the importance of the location of a bank so as to be attractive,

appealing and accessible to the customers. This is why most of the commercial banks in Burundi

have their headquarters located in the capital city of Bujumbura where the population is big and

many people are able to access their banks‟ services. This is because the location of a firm in

relation to its target market will influence the performance of the firm because of the cost of

delivering the goods and services to consumers. It is very critical that commercial banks

select a location that will serve the customers in a cost-effective manner to reduce on the

overheads.

Furthermore, the findings in table 4.2 revealed that promotion as a determinant of marketing

strategy was assessed by the respondents as satisfactory (average mean=3.45, std=1.175). This

was attributed to the fact that majority of the respondents agreed that their banks offer price

discounts and coupons (mean=3.99, Std=1.071). In addition, respondents agreed that their banks

use advertising to present their products and ideas (mean=3.69, Std=1.137), and use direct

51

marketing to increase profits (mean=3.67, Std=1.029). Similarly respondents agreed that due to

advertising, there has been an increase in the sales at their banks (mean=3.65, Std=1.149).

However, respondents were not in full agreement that the use of sales promotion led to increased

brand loyalty of their banks (mean=3.20, Std=1.144). Furthermore, respondents were not in full

agreement that their banks advertise their products through various media platforms (mean=3.15,

Std=1.289) and also use personal selling and publicity to promote their products (mean=2.82,

Std=1.405).

The above responses imply that most of the commercial banks have understood the relevance of

promotions as a marketing strategy since it enables them to reach as many customers as possible.

One of the most profound methods used by commercial banks have been advertising. This is

because, this method is a means in which commercial banks employ to differentiate themselves

from other competitors. They relay information about their different products and services and

the different benefits one gets if they did business with them. Indeed promotion is important

because, after developing a product, setting the best market price and identifying an

appropriate channel for distribution, a commercial bank must promote it to potential

buyers. This is because it is essential for commercial banks to notify the potential customers

about the product‟s obtainability or to inform the consumer, using promotion media such as

radio, print, or television. However, commercial banks must cautiously survey each and every

substitute medium and assess not only the costs but also the effectiveness of the medium in

meeting the set objectives.

All in all, the results in table 4.2 revealed that marketing strategy was assessed by the

respondents as satisfactory (overall average mean=3.63, Std=1.016). This was attributed to the

fact that all the determinants of marketing strategy which were assessed in this study were all

found to be satisfactory. In other words, price, product, place and promotion, were all found to

be satisfactory. This implies that commercial banks have appreciated the value of employing

marketing strategies in their businesses so as to promote sales performance through customer

attraction and retention and eventual loyalty.

Furthermore, the researcher also asked the key informant interviews (i.e. department

managers/supervisors) of the most common marketing strategies they have been using in their

52

banks which is different from the ones captured in the quantitative results, and why the

preference for such strategies. Their responses were summarized as below:

As a bank, we are offering a feature that no other competitors have. We are doing this

using the new technology equipment that we secured last year. The equipment makes it

much easier for our customers to handle their financial transactions online using their

smartphones. It is through this tool that we create a marketing campaign intended to

meet their needs (Bank C, Manger, 13th

August, 2018).

Over the past five years, we have been sending our employees abroad to further their

studies and be able to come back with knowledge and ideas that set us apart from our

competitors. So far we have more than 70 employees well trained and knowledgeable of

the banking industry and how to handle customers. They have been able to come up with

good customer care services that are quick, timely and quality. This has so far increased

the number of customers that we have compared to the beginning years of establishment

(Bank A, Manager, 17th

August, 2018).

This bank is currently providing different packages for farmers, widows, youths, school

fees, teacher loans, and business loans to diversify the market segment. The bank is also

doing its corporate social responsibility by drilling boreholes for the communities,

digging pit latrines for the local masses in the rural areas, renovating dilapidated

schools and hospitals to make such social services affordable and nearer to the people

while at the same time educating the population about the importance of banking (Bank

B, Manager, 15th

August, 2018).

We have embarked on promotional activities in partnership with telecommunication

companies and mainstream media. We are offering competition prices where any person

who banks with us and has a minimum of BIF 50,000 stands a chance of winning a jack

pot price of BIF 100,000,000million. I can assure you, before, this campaign, very few

customers used to have a minimum of BIF50,000 in their account, but currently we have

more than 10,000 customers with a minimum of BIF100,000 in their accounts (Bank D,

Manager, 16th

August, 2018).

53

The above responses indicate that commercial banks have been using different marketing

strategies to remain afloat in the business. This is because the benefits of setting a clear

marketing target are evident to the sales performance of a financial institution. First, it aims at

giving the staff a clear sense of direction in terms of where the business is going and what is

expected of them. Secondly, it‟s useful when evaluating the success of the business. The third

benefit is that it will ensure that all the efforts and actions are focused on obtaining the set

objectives and lastly, it will help motivate the staff both leaders and their team and also help

reward them when the project is completed. Therefore, given the relevance of marketing

strategies to the survival of the banking institutions, they must as a result set aside a significant

portion of their budgets on marketing to ensure that the company experiences an exponential

growth in the sales.

4.4 The Descriptive Statistics for Sales Performance

The dependent variable which is sales performance was measured using sales volume and

profitability. The mean values were determined using the scores provided in the table below.

Furthermore, table 4.3 gives the summary of the mean values for sales performance.

Scale Mean Range Response Interpretation

5 4.21-5.00 Strongly agree Very Satisfactory

4 3.41-4.20 Agree Satisfactory

3 2.61-3.40 Not sure Fairly satisfactory

2 1.81-2.60 Disagree Unsatisfactory

1 1.00-1.80 Strongly disagree Very unsatisfactory

54

Table 4.3: Sales Performance

(n=172)

Sales Performance Mean Std. Deviation Interpretation

Sales Volume

The sales volume of this bank‟s products increased

because of good marketing strategies.

3.94 1.069 Satisfactory

The sales volume of this bank‟s services increased

because of employee responsiveness to customer

complaints.

3.88 1.093 Satisfactory

The sales volume of this bank‟s products increased

because of quality.

3.76 1.122 Satisfactory

The sales volume of this bank‟s products increased

because of customer satisfaction.

3.73 1.190 Satisfactory

The sales volume of this bank‟s products has been

increasing in the past 5 years.

3.03 1.335 Fairly

satisfactory

Average mean 3.67 1.162 Satisfactory

Profitability

The sales of this bank‟s products have been increasing in

the past 5 years.

4.09 .904 Satisfactory

The return on investment of this bank has been

increasing in the past 5 years.

3.68 1.203 Satisfactory

The return on equity of this bank has been increasing in

the past 5 years.

3.66 1.093 Satisfactory

The profit margin of this bank has been increasing in the

past 5 years.

3.42 1.270 Satisfactory

The return on assets of this bank has been increasing in

the past 5 years.

3.35 1.127 Fairly

satisfactory

Average mean 3.64 1.119 Satisfactory

Overall Average Mean 3.66 1.141 Satisfactory

Source: Primary Data, 2018

The results indicated in table 4.3 revealed that majority of the respondents assessed sales volume

of the commercial banks in Burundi as satisfactory (average mean=3.67, Std=1.162). This was

attributed to the fact that majority of the respondents agreed that the sales volume of their banks‟

products increased because of good marketing strategies (mean=3.94, Std=1.069), increased

because of employee responsiveness to customer complaints (mean=3.88, Std=1.093), increased

because of quality (mean=3.76, Std=1.122) and because of customer satisfaction (mean=3.73,

Std=1.190). However, the respondents were not in full agreement that the sales volume of their

banks‟ products has been increasing in the past 5 years (mean=3.03, Std=1.335)

55

Furthermore, the study revealed that majority of the respondents assessed the profitability of the

surveyed commercial banks as satisfactory (average mean=3.64, Std=1.119). This was attributed

to the fact that majority of the respondents agreed that the sales of their banks‟ products

(mean=4.09, Std=0.904), the return on investment of their banks‟ products (mean=3.68,

Std=1.203), the return on equity of their banks‟ products (mean=3.66, Std=1.093) and the profit

margin of their banks have been increasing in the past 5 years (mean=3.42, Std=1.270).

However, they were not in full agreement that the return on assets of their banks have been

increasing in the past 5 years (mean=3.35, Std=1.127).

Generally the study revealed that sales performance was assessed by the respondents as

satisfactory (overall average mean=3.74, Std=1.072). This was attributed to the fact that all the

determinants of sales performance as indicated in table 4.6 were all assessed as satisfactory. This

implies that the sales performance of the surveyed commercial banks in Burundi is explicit

because of the good marketing strategies being employed.

Furthermore, the researcher asked the key interview informants of what had been their sales

performance in the past five years and what could have been the contributing factors. Their

responses were summarized as below:

The bank has been gradually increasing its sales performance mostly in profitability.

However, given the tough economy in the country and interference from the central bank,

return on investment has been slow (Bank B, Manager, 15th

August, 2018).

We have been realizing some good sales in terms of sales volumes for our different

products. We injected a lot in promotional activities that is why there has been a good

improvement in our sales in the past five years (Bank A, Manager, 17th

August, 2018).

The institution has been dragging in some areas of its sales performance. The

competition is rough and the economy is weak, so much of the return on assets has been

low including poor recovery of loans. But nonetheless we are expecting better

performance with time (Bank C, Manger, 13th

August, 2018).

56

Yea, what can I say, there have been good and bad times in the past five years. The good

times made us realize good sales performance because we introduced a promotional

strategy that attracted most customers and caused customer satisfaction and loyalty.

However, some of the bad times was when we lost some of our key performing employees

in a tragic accident (Bank D, Manager, 16th

August, 2018).

Additionally, the researcher asked the key interview informants of what they expect to achieve in

their sales performance in the next five years. Their responses were summarized as below:

We have started to open new branches across the country including rural areas to trap

and attract the unbanked rural masses. We believe this move will help us achieve better

sales performance in the next five years (Bank C, Manger, 13th

August, 2018).

The institution has opened a new department for research, innovation and development.

This is intended to create services and products that meet the needs and demands of

different customer segments in the country. This will help capture as many customers as

possible hence we are sure that the next five years will be good in terms of sales

performance (Bank D, Manager, 16th

August, 2018).

The institution intends to diversity its investments in agriculture, real estates, and gold

products. This in turn is expected to provide alternative sources of income to the bank

and also increase its sales in terms of return on investments. The next five years must be

bright indeed for our bank (Bank A, Manager, 17th

August, 2018).

We are working on coming ways to partner with other institutions in the private sector so

as to bank and transact with us. So far we have up to 120 institutions but we have a

target of working with at least 350 institutions in the next five years. If this is achieved,

we expect our sales performance to drastically improve (Bank B, Manager, 15th

August,

2018).

57

4.5 The Effect of Product on Sales Performance in the Commercial Banks in Bujumbura

The first objective of this study was to determine the effect of product on sales performance in

the commercial banks in Bujumbura. Table 4.4 gives the summary of the findings.

Table 4.4: The Effect of Product on Sales Performance in the Commercial Banks in

Bujumbura

Product Standardized Coefficients

Beta (β)

Significance

(p)

Adjusted R2=0.001 0.084 0.276

F=1.195, p=0.276

Dependent Variable: Sales Performance

The results in table 4.4 revealed that product as a marketing strategy does not significantly affect

sales performance among commercial banks in Burundi (Adjusted R2=0.001, p=0.276).

Testing the Hypothesis (Ho1): the level of significance (p-value) is tested at 0.05. If the p-value

is ≤ 0.05, the null hypothesis is rejected; otherwise if the p-value is ≥ 0.05, the null hypothesis is

accepted. As in the case of this study, the p-value was > 0.05, thus upholding the null hypothesis

that there is no significant effect of product on sales performance of commercial banks in

Bujumbura. This implies that the commercial banks have not put much effort into setting their

products in such a way that are attractive and appealing to the customers. This is because

products and services such as deposits, checking account services, business, personal and

mortgage loans, certificates of deposit (CDs) and savings accounts to individuals and small

businesses if well packaged and branded can influence the profitability of a commercial banking

institution.

Furthermore, the study found that the regression model was not the best fit for predicting the

effect of product on sales performance (F=1.195, p=0.276). Similarly, the study revealed that

every unit change in a product would cause a variance of 8.4% in sales performance

(Beta=0.084, p=0.276). However, this change is so small and negligible since it does not

contribute significantly to the changes in sales performance.

58

4.6 The Effect of Price on Sales Performance in the Commercial Banks in Bujumbura

The second objective of this study was to examine the effect of price on sales performance in the

commercial banks in Bujumbura. Table 4.5 gives the summary of the findings.

Table 4.5: The Effect of Price on Sales Performance in the Commercial Banks in

Bujumbura

Price Standardized Coefficients

Beta (β)

Significance

(p)

Adjusted R2=0.002 0.087 0.255

F=1.304, p=0.255

Dependent Variable: Sales Performance

The results presented in table 4.5 revealed that price as a marketing strategy used by the

commercial banks of Burundi does not significantly affect sales performance (Adjusted

R2=0.002, p=0.255).

Testing the Hypothesis (Ho2): the level of significance (p-value) is tested at 0.05. If the p-value

is ≤ 0.05, the null hypothesis is rejected; otherwise if the p-value is ≥ 0.05, the null hypothesis is

accepted. As in the case of this study, the p-value was > 0.05, thus upholding the null hypothesis

there is no significant effect of price on sales performance of commercial banks in Bujumbura.

This implies that the commercial banks have not adequately exploited the relevance of price in

their businesses. They may not be giving into price strategies such as providing bonus packs to

customers, lowering prices where necessary and when necessary, or offering discounts to

potential customers, thus the inability to realize any improvement in sales performance.

Additionally, the study found that the regression model was not the best fit for predicting the

effect of price on sales performance (F=1.304, p=0.255). In the same way, the study revealed

that every unit change in a price would cause a variance of 8.7% in sales performance

(Beta=0.087, p=0.255). However, this change is so insignificant that it does not contribute to the

changes in sales performance.

59

4.7 The Effect of Place on Sales Performance in the Commercial Banks in Bujumbura

The third objective of this study was to evaluate the effect of place on sales performance in the

commercial banks in Bujumbura. Table 4.6 gives the summary of the findings.

Table 4.6: The Effect of Place on Sales Performance in the Commercial Banks in

Bujumbura

Place Standardized Coefficients

Beta (β)

Significance

(p)

Adjusted R2=0.043 0.220 0.004

F=8.608, p=0.004

Dependent Variable: Sales Performance

The results in table 4.6 revealed that place as a marketing strategy used by the commercial banks

of Burundi significantly affect the variance in sales performance by 4.3% (Adjusted R2=0.043,

p=0.004).

Testing the Hypothesis (Ho3): the level of significance (p-value) is tested at 0.05. If the p-value

is ≤ 0.05, the null hypothesis is rejected; otherwise if the p-value is ≥ 0.05, the null hypothesis is

accepted. As in the case of this study, the p-value was < 0.05, thus rejecting the null hypothesis

that there is no significant effect of place on sales performance of commercial banks in

Bujumbura and therefore upholds the alternative hypothesis. This is because when the banks use

the marketing strategy of beautifying the exterior and interior appearance of the bank, being in an

accessible location, and having a distribution channel that is often available, then sales

performance will highly likely be realized. Moreover, the study found that the regression model

was the best fit for predicting the effect of place on sales performance (F=8.608, p=0.004). In the

same way, the study revealed that every unit change in a place would cause a significant variance

of 22% on sales performance (Beta=0.220, p=0.004).

4.8 The Effect of Promotion on Sales Performance in the Commercial Banks in Bujumbura

The fourth objective of this study was to establish the effect of promotion on sales performance

in the commercial banks in Bujumbura. Table 4.7 gives the summary of the findings.

60

Table 4.7: The Effect of Promotion on Sales Performance in the Commercial Banks in

Bujumbura

Promotion Standardized Coefficients

Beta (β)

Significance

(p)

Adjusted R2=0.058 0.253 0.001

F=11.622, p=0.001

Dependent Variable: Sales Performance

The results presented in table 4.7 revealed that promotion as a marketing strategy used by

commercial banks significantly affect sales performance by a variance of 5.8% (Adjusted

R2=0.058, p=0.001).

Testing the Hypothesis (Ho4): the level of significance (p-value) is tested at 0.05. If the p-value

is ≤ 0.05, the null hypothesis is rejected; otherwise if the p-value is ≥ 0.05, the null hypothesis is

accepted. As in the case of this study, the p-value was > 0.05, thus rejecting the null hypothesis

that there is no significant effect of promotion on sales performance of commercial banks in

Bujumbura. This implies that if the banks provide price discount for their services and products,

use advertising through different media platforms, and sell their products and services directly to

the public, then there will be a high chance for them to improve in their sales performance.

Besides, the study found that the regression model was the best fit for predicting the effect of

promotion on sales performance (F=11.6228, p=0.001). Additionally, the study revealed that

every unit change in a promotion strategy would cause a significant variance of 25.3% on sales

performance (Beta=0.253, p=0.001).

Table 4.8: The Effect of Marketing Strategy on Sales Performance in the Commercial

Banks in Bujumbura

Marketing strategy Standardized Coefficients

Beta (β)

Significance

(p)

Adjusted R2=0.033 0.197 0.009

F=6.900 p=0.009

Dependent Variable: Sales Performance

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The results in table 4.8 revealed that marketing strategies significantly affect the variance in sales

performance by 3.3% (Adjusted R2=0.033, p=0.009). This implies that proper distribution

channel, location and promotional efforts of the banks such as advertising and price discounts

increases the chances for sales performance. In addition, the study found that the regression

model was the best fit for predicting the effect of marketing strategies on sales performance

(F=6.900, p=0.009). Additionally, the study revealed that every unit change in a promotion

strategy would cause a significant variance of 19.7% on sales performance (Beta=0.197,

p=0.001).

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Table 4.9: Multiple Regression Analysis for the Effect of Marketing Strategies on Sales

Performance

Marketing Strategy Standardized Coefficients

Beta (β)

Significance (p)

Product 0.071 0.488

Price 0.139 0.231

Place 0.146 0.269

Promotion 0.271 0.036

Adjusted R2=0.061

F=55.059, p=0.000

a. Dependent Variable: Sales Performance

The results presented in table 4.9 revealed that marketing strategy significantly affects sales

performance by a variance of 6.1% (Adjusted R2=0.061, p=0.006). This implies that

improvement of marketing strategy such as product, price, place or promotion can cause a

significant effect on sales performance. In addition, the study found that the regression model

was the best fit for predicting the effect of marketing strategies on sales performance (F=3.759,

p=0.006). Furthermore, promotion as a marketing strategy is the only strategy that significantly

predicts the variance in sales performance among commercial banks in Burundi. This is because

for every unit change in promotion, a prediction of 27.1% variance will be realized in sales

performance (Beta=0.271, p=0.036).

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CHAPTER FIVE

DISCUSSION OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.0 Introduction

This chapter presents the discussion of the study guided by the study objectives. The discussion

of this study findings were done by reviewing related literature, and comparing and contrasting

with other previous studies. The study was later concluded and appropriate recommendations

accruing from the findings were made.

5.1 Summary of Major Findings

The study found that product as a marketing strategy does not significantly affect sales

performance among commercial banks in Burundi (Adjusted R2=0.001, p=0.276). Furthermore,

the study found out that price as a marketing strategy used by the commercial banks of Burundi

does not significantly affect sales performance (Adjusted R2=0.002, p=0.255). On the other hand,

the study found out that place as a marketing strategy used by the commercial banks of Burundi

significantly affect sales performance (Adjusted R2=0.043, p=0.004). In addition, the study

found out that promotion as a marketing strategy used by commercial banks significantly affect

sales performance (Adjusted R2=0.058, p=0.001). Overall, the study revealed that marketing

strategies significantly affect sales performance (Adjusted R2=0.033, p=0.009).

5.2 The Discussions of the Major Results

5.2.1 The Effect of Product on Sales Performance in the Commercial Banks in Bujumbura

The first objective of this study was to determine the effect of product on sales performance of in

the commercial banks in Bujumbura. The study revealed that product as a marketing strategy

does not significantly affect sales performance among commercial banks in Burundi. This is

attributed to the fact that the surveyed commercial banks have not yet known and understood the

relevance of product marketing. This is the reason why the product marketing strategy being

used is having no significant effect on their sales performance. In addition, due to poor product

marketing strategy, a lot of potential customers remain unbanked in Burundi. And yet if product

marketing was focused on knowing customers‟ needs and the problems the company or product

could solve, the sales performance of the commercial banks would greatly improve. This is

because by identifying the right product and getting it to the right customers, product marketing

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drives sales and profits. Furthermore, if the commercial banks of Burundi could use customer

data wisely so as to develop new products, as well as create smarter overall marketing strategies,

they would be able to realize bumper improvement in sales performance.

Though the current study in the context of commercial banks in Burundi did not find product

marketing strategy to affect sales performance, other studies by Kisaka (2019), Mahmood and

Fatimah Hajjat (2014), Kiprotich (2013), Ardjouman and Asma (2015), and Ebitu (2016) found

that product marketing affects sales performance. The above authors contend that product

marketing strategy contribute to the development of a firm‟s competitive advantage which

consequently leads to improvement in sales performance. This is because product marketing

strategy displays quality products which meet the needs of its customers and their individual

expectations.

Indeed good product marketing should focus solely on existing customers and keeping them

happy. To succeed, the commercial banks in Burundi need deep knowledge of who their

customers are, what they want, what influences their decisions, what problems they need to

solve, and how they perceive that the banks can provide a solution. Banks should equally know

that as customers keep buying the products or the services, they are actually buying solutions to

their problem. So, knowing their problem enables the bank to build and market the best solution

to that problem. Having this expertise gives a commercial ban an influential voice in shaping the

goods and services it provides.

5.2.2 The Effect of Price on Sales Performance in the Commercial Banks in Bujumbura

The second objective of this study was to examine the effect of price on sales performance in the

commercial banks in Bujumbura. The study revealed that price as a marketing strategy used by

the commercial banks of Burundi does not significantly affect sales performance. This was

attributed to the fact that the marketing system used by the commercial banks did not

comprehensively use free samples and bonus packs, pricing strategy, price discounts and

penetration pricing.

However, studies by Nelson and Chiew (2005) and Osman et al (2011) on price discounts, free

samples, bonus packs, and in-store display revealed that they are associated with product trial

and increase in sales performance. Furthermore, a study by Odhiambo (2013) on pricing strategy

65

and sales volume revealed that pricing strategy has a significant effect on sales performance.

Furthermore, in consent with the findings of Odhiambo (2013), Bingqun et al., (2016) and

Farideddin (2016) on their study on the impact of price promotion strategies on sales

performance found positive effects.

Additionally, respondents indicated that their companies use penetration pricing, however, this

was found not to affect sales performance. Conversely, this result contradicts with that of Sije

and Oloko (2013) and Njomo and Margaret (2016) who conducted a study on market penetration

strategies and organizational performance and found positive and significant correlations.

5.2.3 The Effect of Place on Sales Performance in the Commercial Banks in Bujumbura

The third objective of this study was to determine the effect of place on sales performance of in

the commercial banks in Bujumbura. The study revealed that place as a marketing strategy used

by the commercial banks of Burundi significantly affects sales performance. This was attributed

to the fact that majority of the respondents agreed that their banks are very appealing in

appearance both by exterior and interior décor, located in accessible areas and use music to

positively attract and influence customer purchase behavior.

The findings of the current study are in line with studies done by Egle, and Maciejewska (2012),

Parsons et al (2010), Chang et al (2011), Kariuki (2012) and Morrison et al (2011) which

revealed that use of attractive stimuli‟s such a as medium volume music with well-spaced sound

sources lighting, noise, colors, signs and symbols has an influence on customers purchase

decision. In the same vein, the findings revealed that geographic location has a significant

influence on profitability and close location of organizations selling similar products affects

performance. These statements are similar to studies done by Hansen and Solgaard (2004), and

Barnard et al (2011) on retail stores located far away from their customers and found that they

have a negative effect on their purchase intention. They also found that it reduces frequency of

customers visiting a store and eventually influence sales performance.

Indeed it should be taken into consideration that buying decision of a commercial bank depends

where its products are to be sold. The image of a commercial bank is also related with the

classification of place strategy and this is exclusive strategy, selective strategy and intensive

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strategy. Exclusive place strategy is understood when only one brand is sold and it is sold in few

places. High price range is involved in this strategy. Secondly, selective place strategy is

concerned when products are sold at selected places and this transaction may occur outside of the

company but with collaboration must retain between buyers and sellers. Lastly, intensive place

strategy is used most of time which is focused for low price and high volume strategy. This

strategy is convenient for consumers when certain factors are fulfilled like channels, locations,

inventory and availability of these factors affect consumers in order to establish their purchasing

decision.

5.2.4 The Effect of Promotion on Sales Performance in the Commercial Banks, Bujumbura

The fourth objective of this study was to establish the effect of promotion on sales performance

of in the commercial banks, Bujumbura. The study revealed that promotion as a marketing

strategy used by commercial banks significantly affects sales performance. This was attributed to

the fact that majority of the respondents agreed that their banks offer price discounts and

coupons, and uses adverts to promote its products and services. This is in line with the findings

of Ashkan (2016) and Akanbi and Adeyeye (2011) which revealed that advertising has an impact

on sales performance.

However, this study indicated that sales promotions and personal selling of bank products and

services fairly affects sales performance. Contrary to the findings of this study is that of Mullin

(2010) and Syeda et al., (2018) who found that sales promotion strongly and significantly affect

sales performance by increasing sales volume, increasing repeat purchase, increasing customer

loyalty, increasing product usage, creating interest, creating awareness and creating brand

awareness.

The study also indicated that personal selling and publicity was fairly used by the commercial

banks to promote products and services through offers of price discounts and coupons. This is in

line with the findings of Cheruiyot and Peter (2016) who found that direct marketing advertising,

such as personal selling, sales promotion and public relations enhance the company‟s

performance by enhancing customer attraction, customer loyalty, sales volumes, and branch

expansion. Agreeing with Cheriyot and Peter (2016), Amusat and Ajiboye (2013) in their study

67

found out that sales promotion activities such as bonus, coupons, free samples, price promotion

and premiums affects sales volume.

5.2.5 The Effect of Marketing Strategy on Sales Performance among Commercial Banks in

Bujumbura, Burundi

The purpose of this study was to determine the effect of marketing strategies on sales

performance in the commercial banks in Bujumbura, Burundi. The study revealed that marketing

strategies significantly affect sales performance. This was attributed to the fact that the

commercial banks in Burundi emphasized place and promotion strategies in their marketing

hence attracting customers and consequent increase in sales performance.

The current study is in agreement with the findings of Kasiso (2017) and Muthengi (2017) who

carried out a study on the effects of marketing strategies on sales performance of commercial

banks in Kenya and found significant and positive effects between the variables. In a similar

manner, Gituma (2017) in his study also consents with the findings of the present study when he

conducted a study on the effects of marketing mix on sales performance and found a positive and

significant effect. However, contrary to the above findings was that of Heiner and Mühlbacher

(2010) on strategic marketing and business performance who found low impact of strategic

marketing on financial performance, in conflict with several previous studies which proposed the

link to be strongly positive.

Furthermore, studies by Kiprotich (2018), Pourhosseini and Zohre (2013), Ardjouman and Asma

(2015) explored the effect of marketing strategies on sales performance and found out that there

was a significant effect. For instance, Ardjouman and Asma (2015) that there is a high level of

awareness of the significant roles played by marketing management strategies in the performance

of small and medium enterprises. Pourhosseini and Zohre (2013) found out that marketing

strategy had a positive and meaningful relationship on sales performance, while Kiprotich (2018)

found out that sales performance is significantly influenced by the 4 ps.

5.3 Conclusions

Objective one: product as a marketing strategy does not significantly affect sales performance

among commercial banks in Burundi. This is because most of the commercial banks in Burundi

68

do not put in enough efforts to understand their customers, communicate with them and

understand what is being demanded in the market. Due to the problem of laxity on the side of the

commercial banks to understand what is suitable and needed by their customers, their products

end up being unattractive hence causing a lot of people preferring not to do business with the

banks consequently affecting the banks sales performance.

Objective two: the study revealed that price as a marketing strategy used by the commercial

banks of Burundi does not significantly affect sales performance. This is because the banks have

not adequately embraced the importance of using free samples and bonus packs to increase its

sales performance, and the use of pricing strategy, penetration pricing, and price discount to

influence sales performance.

Objective three: place as a marketing strategy used by commercial banks in Burundi has a

positive and significant effect on sales performance. This is because location of most banks in

Bujumbura makes them more accessible and generates more returns than those in rural areas. In

addition, bank‟s interior and exterior décor and use of attractive stimuli such as music has an

influence on consumer purchase behavior and subsequent increase sales volume.

Objective four: promotion as a marketing strategy used by the commercial banks in Burundi has

a positive and significant effect on sales performance. This is because commercial banks use

advertising to present product and ideas hence increasing sales performance. In addition, the

commercial banks use sales promotion to create interest, brand awareness and increase brand

loyal, as well as personal selling and publicity, and price discounts and coupons for the same

purpose of promoting sales performance.

Overall conclusion

The study revealed that marketing has become a major function in the banking industry as a

result of increased competition brought about by bank consolidation and reforms. Indeed,

marketing strategies affect sales performance among commercial banks in Burundi. Irrespective

of the duration of existence, or the number of branches they have, all banks shared the same

sentiments that marketing has an impact on the sales volumes realized. All banks agree on the

opinion that marketing strategies have an immense contribution on the sales volumes realized.

69

Irrespective of the number of employees, all banks agree on the opinion that marketing strategies

have an immense contribution on the sales performance experienced by the different banks.

5.4 Recommendations

5.4.1 The Effect of Product on Sales Performance in the Commercial Banks in Bujumbura

This study revealed that product does not significantly affect sales performance. However, this

was due to the fact that commercial banks did not put in more efforts in understanding their

customer segments and their different needs. It is therefore imperative that the management of

the commercial banks develop and test their products to confirm their adaptability and suitability

to the target customers. This can be achieved by frequently carrying out market research and

customer satisfaction surveys.

The study also found a weak use of packaging strategy among commercial banks. This therefore

implies that the management of the commercial banks should embrace good and quality

packaging strategies of their products and services so as to increase recognition and subsequent

improvement in sales performance. This can be achieved by building attractive and interactive

website that provides informative and feedback oriented platform for customer enquiries and the

use of better communication strategies such as mobile phone messages and emails to inform

customers of more attractive products and services.

5.4.2 The Effect of Price on Sales Performance in the Commercial Banks in Bujumbura

The study found that price strategy did not significantly affect sales performance of commercial

banks. Therefore the management of the commercial banks should endeavor to ensure that they

adopt affordable pricing strategies such as free samples and bonus packs, discounts, personal

selling and penetration pricing. This is because Burundi is a small country with a weak economy

and majority of the people are unbanked due to poverty hence using the right price strategy can

help attract the unbanked masses.

5.4.3 The Effect of Place on Sales Performance in the Commercial Banks in Bujumbura

The study found that place strategy significantly affected sales performance among commercial

banks. However, due to the high level of competition and bank concentration in one town area

(i.e. Bujumbura), the management of commercial banks need to embrace more innovative and

ingenious ways of attracting and retaining their customers. This can be achieved by providing

70

better lighting, coloring, and smartness of the interior décor of the bank, and cleaning, trimming,

sculpturing and beautifying the exterior décor. This can also be supplemented by installing an

aquarium in the interior section of the banking hall, installing DSTv to ease customers as they

wait to receive services or use of music stimuli to attract a given section of the market segment,

e.g. the youth.

5.4.4 The Effect of Promotion on Sales Performance in the Commercial Banks, Bujumbura

The study found that promotion strategy significantly affected sales performance. Therefore the

management of commercial banks should emphasize the use of personal selling and publicity to

promote their products and services. Through this, they will be able to have a direct interaction

with their customer hence know what their customers need and want.

In addition, price discounts, sales promotions and advertising on different media platforms such

as print, radio, television, online should be used to target different segments of customers to buy

the products and services. This can be achieved by involving public personalities such as

musicians, comedians, DJs, footballers and athletes in their advertising campaigns. In addition,

the bank should have attractive social media pages that display information about their products

and services including their benefits.

5.5 Contribution to New Knowledge

Several proponents such as Gituma (2017), Heiner and Mühlbacher (2010), Muthengi (2017) and

Kasiso (2017) have found strong and positive influence of marketing strategies on sales

performance. However, the current study found that only place and promotion strategy affect

sales performance. This study adds to the body of new knowledge that the banking institutions

should emphasize equally on price and product for them to capture more customers and increase

their sale volume and consequent increase in sales performance.

Furthermore, the Marketing Mix Theory was also found to be a perfect theory for this study

since it explains very well the components of products, price, place and promotion strategies that

were used in the current study. It is therefore helpful in solidifying and strengthening the

products and services of the commercial banks so as to create avenue for improvement in sales

performance.

71

5.6 Areas of further Research

The study looked at only four commercial banks hence limiting geographical coverage. Future

related studies should be done to include all the commercial banks in Bujumbura so as to provide

generalizable results.

Furthermore, future studies should include the use of secondary data so as to substantiate the

extent of sales performance in terms of profitability influenced by marketing strategies for a

period of at least 10 years.

5.7 Limitations of the Study

The reliability of the results (test-retest) was not adequate enough to provide a better explanation

for the consistency of the results of this study instruments. There was need to set up a control

group as to substantiate the reliability of the study. Indeed the researcher addressed this

weakness using Cronbach‟s alpha that measured the internal consistency of the items, with the

intent of finding out how closely related a set of items were as a group.

This study was limited by unresponsive respondents and those who withdrew after the study

process had kick-started. The researcher however, mitigated this by consulting other eligible

respondents within the in the commercial banks for voluntary participation and somehow some

employees were able to participate.

Furthermore, the study was limited by the use of perception scale/Likert scale. However, the use

of qualitative data/key informant interviews helped to mitigate the limitations.

72

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APPENDIX I: TRANSMITTAL LETTER

I am a Masters candidate for Business Administration at Kampala International University

undertaking a dissertation on “Marketing Strategies and Sales Performance of In the

Commercial Banks in Bujumbura, Burundi”. In view of this, I request you to participate in

this study. Kindly answer this questionnaire without leaving any question unanswered. Please be

assured that the information you give will be treated with utmost confidentiality and will be used

for academic purpose only.

Before answering this questionnaire kindly read and sign the attached informed consent.

Thank you very much in advance.

Yours faithfully

…………………………….

Gateka Ella Sandra

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APPENDIC II: INFORMED CONSENT

I am giving my consent to be part of the research study of Ms. Gateka Ella Sandra on

“Marketing Strategies and Sales Performance of In the Commercial Banks in Bujumbura,

Burundi”. I have been assured of privacy, anonymity and confidentiality and that I will be given

an option to refuse participation and right to withdraw my participation any time. I have been

informed that the research is voluntary and that the result will be given to me if ask for it.

Initial ……………………………………………Date ……………………………………….

93

APPENDIX III: QUESTIONNAIRES

Please kindly spare some of your valuable time and respond to the following questions. The

questionnaire items are about a study on “Marketing Strategies and Sales Performance of in

the Commercial Banks in Bujumbura, Burundi”. The researcher has purposely selected you

to participate in this study because you work in National Insurance Corporation. The results of

this study will confidentially be treated and only used for academic purposes. Your participation

is voluntary, and indeed your name may not be required.

Thank you

Section A: Profile of the Respondents

Instruction: please tick the option that best describes you

1. Sex

1) Male 2) Female

2. Age

1) 20-29 2) 30-39

3) 40-49 4) 50 and above

3. Highest Level of Education

1) Certificate 2) Diploma

3) Bachelor 4) Masters

5) PhD

4. Work Experience

(1) 1-5 years 2) 6-10 years

3) More than 10 years

94

Section B: Marketing Strategy

This section is intended to capture information about marketing strategy used by commercial

banks in Bujumbura, Burundi. Answer it to the best of your knowledge by ticking the responses

indicated in the table below that corresponds with your level of agreement or disagreement. Use

the scale below to rate your agreement or disagreement with the statements in the table below.

Strongly disagree Disagree Uncertain Agree Strongly agree

1 2 3 4 5

# Marketing Strategies 1 2 3 4 5

A Product

1 This bank offers a broad product line.

2 This bank has products with a broad market appeal.

3 This bank develops and tests its products to confirm their adaptability

and suitability to target customers.

4 This bank uses packaging strategy that influences consumer-perceived

product quality.

5 This bank‟s brand image has an influence on profitability.

B Price

1 This bank uses pricing strategy to increase its sales volume.

2 This bank uses price discount to influence its sales performance.

3 This bank offers products which are lower in prices compared to market

segments.

4 This bank uses penetration pricing to increase product adoption.

5 This bank uses free samples and bonus packs to increase its sales

performance.

C Place

1 This bank is located in an area that increases its chance for sales

performance.

2 This bank‟s exterior and interior appearance is appealing to customers.

95

3 This bank is located in an area that is accessible to customers.

4 This bank‟s distribution channels influence its product availability.

5 This bank uses attractive stimuli such as music to influence its customers.

D Promotion

1 This bank advertises its products through various media platforms.

2 The use of sales promotion has increased brand loyalty of this bank.

3 Advertising has increased sales at this bank.

4 The use of direct marketing at this bank has led to an increase in profit.

5 This bank offers price discounts and coupons.

6 This bank uses personal selling and publicity to promote their products

7 This bank uses advertising to present its product and ideas.

96

Section C: Sales Performance

This section is intended to capture information about sales performance of the commercial banks

in Bujumbura, Burundi. Answer it to the best of your knowledge by ticking the responses

indicated in the table below that corresponds with your level of agreement or disagreement. Use

the scale below to rate your agreement or disagreement with the statements in the table below.

Strongly disagree Disagree Uncertain Agree Strongly agree

1 2 3 4 5

# Sales Performance 1 2 3 4 5

A Sales Volume

1 The sales volume of this bank‟s products has been increasing in the past

5 years.

2 The sales volume of this bank‟s products increased because of quality.

3 The sales volume of this bank‟s products increased because of good

marketing strategies.

4 The sales volume of this bank‟s products increased because of customer

satisfaction.

5 The sales volume of this bank‟s services increased because of employee

responsiveness to customer complaints.

B Profitability

1 The profit margin of this bank has been increasing in the past 5 years.

2 The return on assets of this bank has been increasing in the past 5 years.

3 The return on investment of this bank has been increasing in the past 5

years.

4 The return on equity of this bank has been increasing in the past 5 years.

5 The sales of this bank‟s products have been increasing in the past 5 years.

THE END

97

APPENDIX IV: KEY INFORMANT INTERVIEWS

For management of the sales and marketing departments only

1. What have been the most common marketing strategies you have been using in this bank?

2. Why did you prefer the marketing strategies mentioned above (Qn.1)?

3. How has the sales performance of this bank been in the past five years?

4. What have been the contributing factors to the good or bad sales performance of this

bank over the past five years?

5. How do you see the sales performance of this bank in the next five years?

The End

98

APPENDIX V: MAP SHOWING LOCATION OF COMMERCIAL BANKS IN

BURUNDI

99

APPENDIX VI: EXTRACTED DATA

The Effect of Product on Sales Performance in the Commercial Banks in Bujumbura

Model R

R

Square

Adjusted

R Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .084a .007 .001 .62426 .007 1.195 1 170 .276

Model Sum of Squares df Mean Square F Sig.

1 Regression .466 1 .466 1.195 .276b

Residual 66.248 170 .390

Total 66.714 171

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 3.437 .277 12.391 .000

Product .080 .073 .084 1.093 .276

a. Dependent Variable: Sales Performance

The Effect of Price on Sales Performance in the Commercial Banks in Bujumbura

Model R

R

Square

Adjusted

R Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .087a .008 .002 .62406 .008 1.304 1 170 .255

Model

Sum of

Squares df Mean Square F Sig.

1 Regression .508 1 .508 1.304 .255b

Residual 66.207 170 .389

Total 66.714 171

Model

Unstandardized

Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 3.424 .278 12.329 .000

Price .078 .069 .087 1.142 .255

a. Dependent Variable: Sales Performance

100

The Effect of Place on Sales Performance in the Commercial Banks in Bujumbura

Model R

R

Square

Adjusted

R Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .220a .048 .043 .61117 .048 8.608 1 170 .004

Model Sum of Squares df Mean Square F Sig.

1 Regression 3.215 1 3.215 8.608 .004b

Residual 63.499 170 .374

Total 66.714 171

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 2.892 .291 9.929 .000

Place .236 .080 .220 2.934 .004

a. Dependent Variable: Sales Performance

The Effect of Promotion on Sales Performance in the Commercial Banks in Bujumbura

Model R

R

Squar

e

Adjusted

R Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .253a .064 .058 .60607 .064 11.622 1 170 .001

Model Sum of Squares df Mean Square F Sig.

1 Regression 4.269 1 4.269 11.622 .001b

Residual 62.445 170 .367

Total 66.714 171

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 2.949 .235 12.531 .000

Promotion .227 .067 .253 3.409 .001

a. Dependent Variable: Sales Performance

101

The Effect of Marketing Strategy on Sales Performance in the Commercial Banks in

Bujumbura

Model R

R

Square

Adjusted

R Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .197a .039 .033 .61411 .039 6.900 1 170 .009

Model Sum of Squares df Mean Square F Sig.

1 Regression 2.602 1 2.602 6.900 .009b

Residual 64.112 170 .377

Total 66.714 171

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 2.931 .310 9.453 .000

Marketing Strategy .219 .083 .197 2.627 .009

a. Dependent Variable: Sales Performance

Multiple Regression Analysis for the Effect of Marketing Strategies on Sales Performance

Model R

R

Square

Adjusted

R Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .287a .083 .061 .60538 .083 3.759 4 167 .006

Model Sum of Squares df Mean Square F Sig.

1 Regression 5.511 4 1.378 3.759 .006b

Residual 61.204 167 .366

Total 66.714 171

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 3.084 .330 9.333 .000

Product .068 .098 .071 .694 .488

Price .125 .104 .139 1.203 .231

Place .157 .141 .146 1.109 .269

Promotion .244 .115 .271 2.119 .036

a. Dependent Variable: Sales Performance