In the name of Allah, the most
Merciful, the most Compassionate
E-MARKETING:
THE ATTITUDES AND EXPERIENCES OF E-MARKETING AS MARKETING AND
BUSINESS COMMUNICATION TOOL
ON THE SAUDI ARABIAN BRITISH BANK IN THE KINGDOM OF SAUDI
ARABIA
E-marketing: the attitudes and experiences of e-marketing as a marketing and
business communication tool
Study
on the Saudi Arabia British Bank in the Kingdom of Saudi Arabia
Author
Supervisor
Dr.
Said …….
E-marketing: the attitudes and experiences of e-marketing as a marketing and
business communication tool
Study
on the Saudi Arabia British Bank in the Kingdom of Saudi
A
Dissertation
Submitted to
In
fulfillment of the requirements for the degree of
Master
of Business Administration
2007
Acknowledgment
In the name of Allah, the most
Merciful, the most Compassionate
To those who lighten to
me the way, and led me to the fountains of knowledge.
I would gratefully present
this scientific humble
effort.
To the owners of white
hands; to my Mother; to my late Father, who gave me the courage and offered me
their heart, they plant a seed and gave me their care and the long-awaited
moment of harvest. To My mother compassionate afford as much sincerely and
silence.
To my honest loyal
Wife, and to my beloved Daughter whom without them this work would not have seen
the light of the sun.
For my magnificent supervisor
whom built ably my educational university steps. Those Distinguished cognizance
privilege whom I learn on there hands and recall of there knowledge. And every
educator, teacher and polite I met. Whom Educates hearts for faith. And working
on nutrition of science and Knowledge to the minds. And to this homeland, which
honours and cherish, and aspired to greater pride major humanitarian message in
a world culture and civilization between the united superior.
To my brothers and my
Friends, especially who helped me and supported me through out this work. I
present all my utmost gratitude essences and educational harvest and the fruit
of years of study.
I present this humble
effort and ask Allah Almighty to accept my work with best acceptance and
satisfaction. And wish everyone's acceptance.
Table
of Contents
Chapter:
I.
Introduction
II.
Literature Review
III.
Industry Review
IV.
Research Methodology
V.
Analysis and Discussion
VI.
Conclusion and Recommendations
Abstract
The paper will discuss
about the attitudes and experiences of E-marketing as a marketing and business
communication tool for the company Saudi Arabia British Bank. With the onset of
new technologies such as e-marketing, businesses have to consider how the new
technology may affect their relationship with others and whether such technology
contradicts with their ethical standards. As the world ages so thus the changes
in business and technology, one change is E-marketing. E-marketing is creating
various changes in the environment of many countries and industries. It provided
a new way for different businesses to improve on their service to clients. E-
Marketing provided a new way for business to improve on their service to
clients. In E-marketing certain business processes can be done without personal
meetings or conferences of the buyer and the seller.
E-marketing has
created wonders for businesses and it has changed the outlook of business not
only in a local setting. In the Saudi Arabian setting it created changes to the
way business is being done on banks. One particular bank that has benefited from
the use of E-marketing is Saudi Arabia British Bank (SABB). E-marketing helped
this bank to provide a modernized means to provide service to its clients. The
paper will take a more detailed look at how e-marketing has created changes in
the services of SABB. The paper will contain an introduction part; it will be
followed by a literature review part. After that there will be a part that will
review the industry, a part on research methodology, a part that will analyze
gathered data and a part that will conclude and provide recommendations
regarding the study.
Chapter One
Introduction
The internet
has created an impact to almost everything in this world. It changed the way
business operates; it also created changes in the way people do their work in
the organization. Internet also helped provide needed information by a business
located in more than one location. It also helped a company inform the clients
who are located in a far place about their products and services. Although it is
believed that internet is being used by individuals to gain power and prestige,
it cannot be ignored that the internet made sure that services can be done on a
faster time. The emergence of electronic communications and the Internet is
rapidly changing traditional marketing methods. Practically every type of
organization, producers to retailers, and hard-goods manufacturers to service
providers, is found on the Internet today. Small local businesses, as well as
large multinational corporations, are flocking to the Web. The future for
e-commerce looks promising since million homes all over the world have either
e-mail or Internet access or the number of households and businesses making
online purchases continues to increase. Saudi British Bank realized the
importance of the computer sector as a mean to keep up with the outer world.
The Saudi
British Bank has given a top priority to have a modern computer based
technology. Also, the Saudi British Bank launched an educational program to
place a computer centre and introduce computer courses in all the branches in
the Kingdom. In 1999, as the Internet started to be involved in all the life
aspects, likewise the Saudi British Bank encouraged the employees to use the
Internet as a powerful and useful communication tool. Companies have the ability
to manage its information scientifically, and placed accurate and scientific
strategies for marketing through the Internet .The internet gives small and
large companies the opportunity to enter the international markets and to
increase the chances of sales and profits if they can meet the clients’
requirement in an atmosphere of intensive competition. The Internet became an
available tool all over the world, and provides communication and trading
between suppliers and consumers which are called E-Marketing which in its turn
add additional value either to producers, distributors or consumers. People have
started to use the name Electronic Commerce to cover the impact that the
Internet Economy will make on the way in which every citizen and every
enterprise, of whatever size, goes about the business of acquiring and providing
goods and services.
When these
goods and services can be inspected and compared on the Internet in a way which
provides the buyer with at least as much information as they can acquire in
local or even in specialized shops .The growth of the Internet shopping in Saudi
Arabia particularly is very impressive despite the fact that online market from
only a fraction of the value of conventional retail market in the region. The
Internet provides numerous other advantages for companies wishing to expand
their overall potential in the international market such as an increase in
international awareness, simplified export documentation, access to low-cost
export market research, improved knowledge of international markets, and
communications cost savings. Perhaps without intention, and even without being
fully aware of the implications, small businesses that were once marketing their
goods or services domestically are now marketing them to the entire world.
Nevertheless, use of the Internet for e-commerce, as opposed to e-business, is
still relatively low in Saudi Arabia for a number of reasons: (1) there is a
general preference for face-to-face transactions along with a large number of
small, local, retail stores; and (2) Banks do not yet trust the security of
online transactions. The future looks very bright for Electronic Commerce in
Saudi Arabia. Many companies started the rush to have an Internet service to
improve and upgrade their business capabilities. They also started to send the
employees abroad to bring up the latest applications and use of the Internet.
Now, the
Internet is found everywhere in Saudi Arabia and has many applications. Many
business leaders consider the Internet to be the backbone for day-to-day
activities for companies and corporations all around the world. Using the
Internet, companies have found new ways of marketing their products and services
to a global customer. In addition Internet is being used by companies for
improved communication, better customer service with ultimate objective of
increasing productivity. The internet is currently being used with different
business processes like management and marketing. The internet when merged with
business process leads to the introduction of better processes that changed the
way business is done. One product of the merge of internet and business
processes is e-marketing. As previously mentioned the paper intends to discuss
about the attitudes and experiences of E-marketing as a marketing and business
communication tool using SABB as an example of a company using such technology.
There is a need for such research to know how E-marketing can be improved
further.
Importance of
the study
E-marketing technology is widely spread through all parts of the world,
including Arab Banks in General and Saudi British Bank in particular. The
research significance is stemmed from the fact lack of studies that handle
e-marketing current and future situation in Saudi British Bank. Since
e-marketing still did not meet the rapid development as the situation in
developed countries. This study will be the first study according to the best
knowledge of the research that will deal with e-marketing in Saudi British
Bank in terms of current and future situation, usage or barriers or the
availability of the required infrastructure for such technique. The importance
of this study stems from the fact that this study will:
Research Problem
Despite the quick
growth of using the Internet in various activities, Many evidences prove that
Saudi British Bank face some barriers in using e-market in their marketing
strategies. These barriers contribute in determining what can still be done to
improve the service. Determining the solutions to the different barriers can
give ideas on what should be the future situation of the organization and the
industry it belongs to. The study is an attempt to investigate the prospects,
the future, and the barriers of e-marketing in Saudi British bank. To
investigate the prospect, situation, future and the barriers of e-marketing
towards Saudi Arabia British bank the paper needs to identify the different
facts regarding e-marketing in the bank. The facts will help in understanding
further the importance of e-marketing. The facts can come out through answering
some research questions/problems. The research questions/problems are as follows
1.
How does e-marketing change the selling activities of
the Saudi British bank?
2.
Can the e-marketing technology be integrated to the
Saudi British bank’s marketing strategy?
3.
Can Saudi British Bank support the use of internet
marketing strategies given its current standing in its industry?
Study
Objectives:
Recent advances in
data collection and data storage techniques, which result in large data bases
with a substantial amount of information, seem to have changed the nature of
research but it doesn’t mean that the research will stay away from using goals.
Advancements in data collection don’t mean that data will be collected without
setting boundaries. Goals are needed to ensure that anything that will be done
have been well thought of. Goals will only focus on certain areas related to the
research. The perspective goals should not be too hard to reach. The aims and
objectives of the study is the guide in determining what boundaries can only be
reached. The aims and objectives of the study include:
1.
To determine the impact of the internet to society and
business organizations.
2.
To know the limits on the use of the internet.
3.
To find to what extent e-marketing is used by Saudi
British Bank in marketing their products by researching about the Saudi British
Bank’s use of e-marketing;
4.
To find out the effects of e-marketing to Saudi
British Bank by researching about the changes that happened to Saudi British
Bank after they made use of E- marketing
5.
To determine how e-marketing is used by Saudi British
Bank as a means to sell services, this can be done through experiencing and
observing how E-marketing is used in Saudi British Bank to sell their services.
6.
To determine the effectivity of e-marketing as a
selling tool for Saudi Arabia British bank.
7.
To suggest some recommendations to improve e-marketing
in Saudi British Bank.
Hypothesis
H01: SABB do use
e- marketing in its selling activities.
H02: SABB face
many restrictions in implementing e-marketing technology.
Methodology and
reasons for doing the research
Based from the random
sampling a minimum of 70 respondents will be asked. Primary research will be
used. In the primary research, the researchers will look for individuals who
they believe have an idea on the attitudes and experiences of E-marketing as a
marketing and business communication tool in Saudi British Bank. The researcher
will go to Saudi British bank and will interview some Saudi British Bank
employees in Riyadh the capital about e-marketing and how it changed the
services of the bank. The researcher scouted for people that they see as someone
who can give appropriate response to the questionnaire. The researcher gave a
letter and narrated its contents to each perspective respondent. The letter
contained the purpose of the study, the study’s goals and the intention of the
researcher to keep the divulged information hidden from other people. If the
perspective respondent agrees to have the interview, the interview part will
then proceed.
As the questionnaire
is being conducted with the respondents, they will be given ample time to
provide answers to the different questions. While the conversation with the
respondents is ongoing the researchers will ask questions related to the study
that was not included in the list. This will help in clearing some ideas related
to the study. The researcher will try to ask questions that will not give the
respondent a hard time but will provide the needed responses for the research.
After answering all the questions the researcher will thank the respondents for
their time and participation in the study Majority of those approached for the
survey were accommodating and gave some of their time in answering some
questions. The research will be done because it is vital to understand how the
e-marketing technology can affect Saudi Arabia British bank, how e-marketing
affect the bank’s delivery of service and the future of such technology in the
banking industry. The research will give a clearer view of the banking industry
in Saudi Arabia and how the e-marketing technologies have changed the industry.
Moreover the research will assist in determining the common concerns in the use
of e-marketing technologies.
Organization of the
study
There are different
chapters for this project. Each chapter has a different focus for a specific
course of action that will benefit the study. Each chapter will bring the study
closer to gathering information about the goal of the study. The first chapter
was the introduction part wherein general ideas and goals of the study were
discussed. The second chapter will be the literature review part. The second
chapter used various resources to gather necessary data. The literatures
presented will come from books and other sources that are deemed to be helpful
in the advancement of awareness concerning the subject. It will give
enlightenment on some of the issues in the study. The third chapter will be a
review of the industry. The fourth chapter will feature more on the Methodology,
type of research, research strategy, data collection and analysis, primary data,
secondary data, sampling, and data analysis. The fourth chapter will focus on
discussing the instruments and methods used for the study to be a success. The
fifth chapter will focus on the presentation of demographic data, the ideas of
the respondents. The last chapter will focus on analysis of data.
Chapter Two
Literature
Review
This chapter will discuss three main
topics that are related to this study. First one will be the Internet, while the
second will be the e-marketing, and finally the internet banking or e-banking.
The Internet is a network of computers connected to each other. The Internet
technology is of particular importance to marketers. Firms are able to eliminate
the time and distance gaps that hinder many dealings, using the most interactive
of all direct marketing tools. A company anywhere in the world can establish a
website on the internet and be instantly available to potential customers from
anywhere in the world. This immediate availability of great importance to all
firms gives a particularly valuable opportunity to smaller firms that lack
established international sales channel. (2000)According
to (1998) banking sector has been subject to many external and internal forces
in most world countries. Technology change is one of the most important eternal
changes on the sector. The Internet represents one of the forces. The Internet
is a key driver of internal changes. The internet makes things easier for people
and organizations. The Internet is causing major delivery changes. The synergies
of these forces will bring about a major transformation of the banking sector.
The
Internet
The origins of the
Internet date back to 1957 when Russia launched the Sputnik satellite and
thereby the space race started. In order to close the gap, the US formed the
Advanced Research Projects Agency, ARPA, within the Department of Defence. In
1972 the first computer-to-computer chat takes place. Between 1982 and 1987, the
foundations of the modern Internet were laid. By 1990 ARPANET ceases to exist
after 33 years. The ban on commercial traffic on the Internet continued till
1991. In 1992 the term "surfing the Internet" is introduced and in 1993
US White House comes on-line, and businesses and media begin
taking notice of the Internet. In 1994 shopping malls arrive on the Internet.
In1996. Internet phones catch the attention of US telecommunication companies
who ask the US Congress to ban the technology (which has been around for years)
Accessed on 25/8/2006] The growth of the Internet during the late1990’s was
phenomenal by all measures; number of households and businesses connected and
number of web sites. Not growing as quickly (often non-existent) were profits
from the many enterprises that had developed as part of the Internet economy.
When the Internet began to emerge in the public consciousness in about 1995/96,
no one really believed that it would affect the global economy as quickly as it
has. Consumers were generally indifferent and business executives thought they
had plenty of time to understand and adapt to the requirements of the new medium
to the surprise of all, it has diffused throughout the global economy more
quickly than any other medium before, i.e. Radio, TV, and Cable TV.
Accessed on
30/8/2006]
(2001) stated
that a bout a decade and half ago, internet was relatively restricted to the
majority population of the world. By 2000 the Internet had become a significant
part of daily life for both consumers and business enterprises especially in
developed countries. (2003) stated that the internet is making both time
and distance irrelevant to many exchanges. Governments have also embraced the
internet technology for their own uses. Several models have been developed to
examine and understand the factors affecting the acceptance of computer
technology in organizations. The theoretical models used to study user
acceptance, adoption, and usage behaviour include the theory of reasoned action.
(1999) indicated that the growth rate of the (WWW) is estimated at about
50 per cent per month. Studies have shown that business investment is moving
rapidly onto the Internet. Around the world, a projected 60 per cent of large
companies and 30 per cent of midsize companies will also use the Internet for
marketing and business purposes.
(1997)
in their study indicated that 71% of business community sample are using (www)
World Wide Web to collect data and information. The table below shows the trade
use of the World Wide Web:
|
Trade use of
World Wide Web |
Percent (%) |
|
Data collection |
71 |
|
Cooperation and
working with other organizations |
54 |
|
Marketing |
46 |
|
Customer service |
38 |
|
Information
publishing |
33 |
|
Selling goods
and services |
33 |
|
Purchasing
products and services |
23 |
The Internet has already made a big
difference to global business operations. The internet has proved to be the
perfect messenger for niche interests, serving individual tastes and diverse
geographical demands. The key to the success of niche net business is first and
foremost brand awareness, but the promotional spend necessary to achieve brand
recognition among the online clutter is now challenging the resources of the
smaller enterprise, at least through traditional promotional mechanisms ( 2000).
With respect to the emergence of the Internet in Saudi Arabia, (1997)
stated that the Kingdom has had an Internet connection since 1994, the
connection and limited Saudi Internet infrastructure was managed by the
Washington Coordinating Centre, which also hosted official Saudi government Web
sites in the United States. Access to the Internet in Saudi Arabia from 1994
through 1999 was limited to selected staff at Universities, and all Riyadh-based
organizations. A few commercial organizations, such as Saudi Aramco, have had
private Internet links for several years. Use of these links is limited to
company business, and access is strictly regulated. Public access to the
Internet, with significant restrictions, was approved by the Council of
Ministers in April 1997 after two years of investigation and deliberation on the
part of most government constituencies. In early March 1997, the Council of
Ministers charged the with setting up a unit for Internet affairs, the
Internet Services Unit. All Internet traffic in Saudi Arabia would go through
this one. The government had contracted with a British company to both filter
out objectionable web sites and monitor access of all sites. By May 1998, KACST
officials announced that experimental operations would begin in October, with
public access beginning in December. Public Internet access began in the Kingdom
in late January 1999 (February 1, 1999). After careful studies and advancements
in technologies, the internets reach grew wider and wider. Its capacities and
capabilities changed and its benefits to people grew more evident.
Impact of the
internet
The merger between the
Internet, corporate and co-operative networks introduced changes in all three.
This must be kept in mind when assessing the nature of cyberspace that develops
with the Internet, as many find it easy to dismiss the Internet because of its
origins in military funding. There are two main social forces that have driven
the Internet to its present position. The first is the military-industrial
complex, which has provided the main funding for some of the more grandiose
projects that make up cyberspace and which provides an important cultural
background to certain technological choices that have been made ( 1999). The
second influence is a grassroots and populist attempt to create networks and
computers that place the power of computers in the hands of individuals,
precisely so that the establishment and elites can be undermined. Here can be
found the enthusiasts who created the personal computer, the programmers who
have created and shared free software and an ethic of free and open use of
networks that still dominates many parts of cyberspace. It is impossible to
predict precisely the future of the Internet and the cyberspace it supports (
1999).
However, the success
of a packet-switching distributed network of computers is undoubted and will
form the basis of future networks. Those on the Internet use it extensively,
usually at least once a day, and use it for a range of activities that include
work and entertainment in equal measure. Internet and Web users are, then, not
only from the most privileged sections of society; they are also committed to
cyberspace and use it extensively. A world-wide computer network that allows
people to communicate with each other exists. It has been created not in fiction
but in fact through the efforts of governments, individuals and corporations.
Its users have a clear and now largely stable demographic profile, with the sole
exception of some uncertainty over whether gender equality lies in the future.
This is a world not of disembodied consciousnesses having access to the sum
total of human information, but of myriad acronyms, corporate rivalries and
gradually growing sources of information and opportunities to communicate with
other humans (1999).
An enterprise might be
very strongly affected by the Internet through other institutions even though it
itself did not connect or utilize the technology. If, for example, its
competitors use the Internet to obtain advantages in input and output markets
and to increase productivity, a firm not using the Internet may find itself at a
severe competitive disadvantage, and indeed be forced out of business.
Institutions are seen as permeable. Each person participates in many
institutions, and the experience with the Internet in one institutional role can
affect other institutional roles ( 2000). The worker who learns to use the
Internet at the office may subsequently use the Internet to participate in
activities of his professional society, to communicate with members of his
family, and to participate in chat rooms discussing politics. Increased labour
mobility engendered by intra-family use of the Internet could affect enterprises
by changing labour markets. Understanding of the overall impact of the Internet
will develop from understanding many individual studies of specific impacts, and
how they fit together. The direct impact of the Internet on the individual user
seems to be the most commonly discussed, probably because it is the simplest to
conceptualize and to measure. It seems unlikely to be the most important. Few
people spend large part of their income on the Internet, and one must assume
that the marginal net benefits of such use are comparable to the cost of
Internet connectivity (2000).
The indirect impact of
the Internet on a participant in an institution may be quite significant.
Consider, for example, the employee who loses his job because his company is
unable to compete with others that use the Internet more effectively and goes
out of business ( 2000). Or consider the stockholders in those companies that
used the Internet effectively to increase productivity and profits, and thus
enhanced their stock values, or the bonuses likely to have gone to managers of
such companies ( 2000). The internet has created an impact to almost everything
in this world. It changed the way business operates; it also created changes in
the way people do their work in the organization. The internet paved by the way
for improvements in terms of creating an easier means of doing someone’s work.
The internet illustrated the different technologies that man has dreamed of. It
was the answer to man’s desire of using technologies that will reduce their
physical work and increase the intellectual activities. Although it is believed
that internet is being used by individuals to gain power and prestige, it cannot
be ignored that the internet made sure that services can be done on a faster
time. Internet also helped provide needed information by a business located in
more than one location. It also helped a company inform the clients who are
located in a far place about their products and services.
Business opportunities provided
by the Internet
(1999) indicated that the
Internet provides the following business opportunities:
1.
Linking companies directly to customers, suppliers,
and other parties.
2.
Allowing companies to skip other players in the value
chain.
3.
Using the Internet as a tool for developing new
products and services for customers.
4.
Allowing companies to dominate the electronic channel
of an entire industry or segment, control access to customers, and set business
rules. (1999)
( (1996) stated that the Internet
can also serve as a platform for new product innovations. Companies can use the
direct access to consumers to collect information that will help them better
develop products to meet the consumers' needs.
Factors limiting growth of the internet
Blythe (2001)
argued that there are various factors that limit the growth of the internet,
among these factors are the following:
-
Technophobia:
Large numbers of people have considerable
resistance to the technology. Currently use of the Net requires a degree of
computer literacy that is not present in the majority of the population.
Some people have the fear of using the
internet technology and this contributes to the limited growth of such
technology. The fear of people arises from doubts regarding how the technology
can be fixed and the cost of repair for the internet technology.
-
Cost of connection and use:
Most of the predictions of growth have
been based on research in the USA and to a lesser extent Australia. In most of
the rest of the world, calls to the server are charged by the minute, and thus a
lengthy session surfing the Net can prove very expensive for the average
consumer. The cost of repair and
maintenance of the system causes fears that prohibit the internet’s growth.
-
Pressure on the system:
The internet has not grown much because
of the pressure for the technology to show immediate benefits.
The number of subscribers is growing at a rate far greater than the ability of
the technology to keep up. This means that most subscribers are faced with
extremely long delays in accessing information. This means that it is sometimes
quicker and less frustrating to go directly to the High Street shops and buy the
item in a conventional way.
-
Cost of hardware:
The hardware used in internet systems
costs much that is why some people are hesitant to use the internet technology.
This contributes to the abrupt growth of the internet because people cannot
experiment on making use of hardware that costs less.
Although, costs of computer equipment are dropping dramatically, and Web-TV
devices are being developed, the cost is still high enough to deter many
potential users in lower socio economic groupings, and certainly high enough to
prevent access by most of the Third World. This means that the Net is still
likely to be the virtual world of the relatively rich for some considerable time
to come.
E-commerce
Many of the
developments related to the information or knowledge society, such as Internet
growth and the emergence of e-commerce, have arisen only over the last five or
six years. The nature of these developments and the speed with which they occur
impose new demands on the ability of government departments to keep abreast of
them and to seek to influence and respond to them. The sheer pace of development
and the absolute necessity to respond rapidly mean that additional resources are
required in key areas if people are to deal adequately with the range of issues
identified and help accomplish the objective of any country being a key player
in the information or knowledge society ( 2002). The Internet has fundamentally
changed business activity. The buying and selling of products and services,
market making, the forging of relationships between companies and customers or
between two or more organizations; all these activities are increasingly being
digitized (2001).
Although the success
of these efforts is not guaranteed, the business landscape is now truly
digitized. Some types of e-Commerce are not likely to succeed. The digital
technology that enables e-Commerce is progressing and will continue to offer
companies opportunities for further changing their business activities. Firms
looking to remain competitive in the e-Business arena have to be prepared to
reorganize and restructure themselves more or less continuously. If the
restructuring of traditional businesses really is so central to their
development of successful e-Business strategies, it is essential to understand
how to manage change effectively in order to sustain competitive advantage
(2001). One of the first challenges companies face when attempting to embrace
e-Business and its corresponding technologies is how to move from being a
physical or bricks and mortar organization to being a digital or virtual
organization ( 2001). It is here that a company encounters its first problem,
which is one of technology. The particular difficulty relates to the attempt to
evolve their legacy systems to an infrastructure that will support e-Business.
Few businesses find themselves in the position where they can throw away the old
and introduce new, customized computer systems. Legacy systems often perform
essential activities upon which daily business processes depend ( 2001).
E-commerce is something that is constantly evolving. As time goes by E-commerce
is changing its different techniques in providing service to the clients and in
making business transactions be done in the shortest time possible. E-commerce
was merged with various aspects of a business, it lead to newer business systems
that revolutionized industries and forced them to reach for much higher goals.
Definition of
E–Banking
The term electronic
banking is almost generic in its nature and therefore it is mostly used without
any further explanation or definition. It should be reminded that electronic
banking is not equal to the term Internet banking although the latter is
undoubtedly the most widespread type of it. Electronic banking includes several
traditional services like telephone banking, credit cards, debit cards, ATMs.
The more recent additions are Internet banking, mobile banking and digital TV
banking. Electronic banking is also known as electronic funds transfer (EFT) and
basically is simply the use of electronic means to transfer funds directly from
one account to another. Electronic banking or e-banking is the newest delivery
channel for banking services. The definition of e-banking varies amongst
researches partially because electronic banking refers to several types of
services through which bank customers can request information and carryout most
retail banking services via computer, television or mobile phone. In fact
electronic banking is an electronic connection between bank and customer in
order to prepare, manage and control financial transactions. Electronic banking
can also be defined as a variety of following platforms: Internet banking,
telephone banking, TV-based banking, mobile phone banking, and PC banking or
offline banking. As on-line Internet banking and mobile phone banking are the
fastest developing areas.
(2003)
defined E-banking as “An electronic connection between bank and customer in
order to prepare, manage, and control financial transaction.” He divided
E-banking into platforms which are: Cash machine, Telephone banking, PC banking,
TV-based banking, Mobile phone, and Internet banking.
(1999) stated that the diffusion of electronic banking is more determined by
customer acceptance than by seller offerings. (1999)
indicated that electronic banking channels are playing an increasingly important
role in the banking sector, and thus they have gained quite a lot of attention
in academic literature lately. There is an increasing concern about the possible
impacts of electronic banking channels on bank customers’ behaviors.
Opportunities and
Challenges
The banking and
finance sector has been a rapid adopter of e-Commerce because its products could
easily be virtualised and the product had priority over place ( 2000). (1998)
observes that banks can generate revenue through increased account access fees,
and benefit from promotional opportunity to cross-sell products such as credit
cards and loans(2000) suggests that the Internet enables banks to offer
low-cost, high value-added financial services. (2000) argues that, banks
as well as consumers had serious concerns about the security of Internet access
to client accounts, which was the biggest challenge. Consumers are increasingly
looking for services they can access from a single entry point.
Benefits of using the Internet in the
banking industry
. (1996 argued that setting up a Web site with
respect to banks is affordable as costs are relatively low. Once established,
the Web site allows a bank to conduct a more targeted business 24 hours a day,
365 days in the year. The Web enables anyone with an Internet connection access,
irrespective of geography, time zone, or computer system. This makes the bank
product more accessible to the new global marketplace. Bank Web sites can
contain electronic forms for customer completion and bank can reply directly via
electronic mail (e-mail). This kind of connection will improve customer
relations and contribute towards the building of customer loyalty. The Web can
give access to a greater store of information than other traditional
communication media, and provide visitors with the means to select and retrieve
only that which appeals to them.
There are basic benefits achieved through the production and marketing of
banking services through the Internet:
A.
The capability of providing some services that cannot
be possible before using the Internet.
B.
The capability of having a better relationship with
clients.
C.
The high capability of reducing costs and charges of
banking service.
D.
Production and marketing of banking services via the
internet gives the bank the opportunity to use an individual marketing strategy
( 2004).
Types of
E-Banking (Internet Banking)
Internet banking refers to the setting up of a Web page by a bank to give
information about its product and services. It involves provision of facilities
such as accessing accounts, funds transfer, and buying financial products or
services online ( 1999). He argued that Internet banking involves consumers
using the Internet to access their bank and account, to undertake banking
transactions. (1997) stated that transactional Internet banking is growing
rapidly. 60 percent of retail banking transactions will be online in ten years'
time. (1997) indicated 20 percent of retail and 30 per cent of corporate
customers will use some form of Internet banking capability within the next five
years. Thus, by encouraging customers to use the Internet for banking
transactions, the banks would save considerable operating costs. ( 1994)
(2003) classified internet banking
websites into three types:
1.
Essential information of E-banking websites:
This website introduces information
about the bank's services and introduces them to customers and the public.
2.
Simple transactional E-banking:
A website that allows customers to
submit requests for different services, make queries on their account balance,
and give feedback to bank. However it does not give the user a permission to do
financial operations.
(2001) stated the online banking
differs in many ways from traditional branch banking. Among one of the most
notable differences is the connection to the bank’s information processing
system. In the past, customers have had a relationship with a bank’s front desk
employee. In online banking customers have direct access to a bank’s information
system either from home, work, school or any other place where a network
connection is available, and thus bypass the bank’s employees. (2001)
argued that due to this new situation the customer is defined as an end-user of
the bank’s data processing system. The Internet banking empowers customers with
greater control of their accounts. Banks achieve cost and efficiency gains in a
large number of operational areas. The Internet brings changes in the working
environment, living conditions and patterns of banking use (1997) Internet
changes place users under a different set of conditions resulting in changes in
their behaviour. One of the outcomes of these changes will be growth in users
with more sophisticated needs. Customers will become more discerning as
information becomes more accessible over the Internet. For instance, Internet
enables consumers to change banks at the press of a button, in the comfort of
their homes. They will have access to on-line that will give them the ability to
compare products and services for the best terms and conditions (1999) (1997)
assessed the strategic impact of Internet banking on financial services industry
and in particular the set-up and operating cost of Internet banking. Internet
banking services allow customers to access their banking accounts from any
location and at any time of the day, it gives advantage to customers to be able
to manage their finances properly and in a more convenient way. According to
(2000) if customers are given the chance to try the innovation, it will minimize
certain unknown fears, especially when customers found that mistakes could be
rectified and thus providing a predictable situation.
(1998) indicated that the
cost of entry to the banking sector is low, returns seem very promising and the
risk seems manageable. (1997) stated that new technologies, like smart cards,
are also lowering entry barriers to the banking business, enabling non-banking
competitors to take away more and more of the profitable elements of the banking
business.
E-banking provides clients with the capability to do business with the bank even
after working hours. In this e-commerce trend no specific software is needed by
the client in operating the internet banking technology but there are major
risks in terms of security of the information divulged by the client since the
internet can at times be prone to attacks and hacking. The properties of the
Internet make it an ideal medium for delivery of banking products and services.
The advantages accruing to a bank can be outlined as follows:
1-
Cost savings:
Internet delivery is cheaper than
physical channels. A simple transaction cost for a non-cash payment at a branch
is likely to cost the bank as much as 11 times more than over the Internet.
2-
Increased
customer base:
One of the primary objectives of
developing new products and services is to attract new consumers and to retain
existing customers. The internet will increase the number of clients; these
clients come from far areas.
3-
Enable mass
customization:
Internet delivery has the
capability to customize information to suit the needs and the likes of each
user. Mass Customization refers to the notion that each individual user
perceives that the service they receive is personalized or customized to their
needs and uses. ( 1998)
4. Marketing and communication:
The World Wide Web has the
capability to host advertisements and other marketing campaigns without facing
incremental charges for prolonged exposure like those found in the traditional
media. ( 1996)
5. Enable innovation:
Internet technologies have paved
the way for a multitude of different banking products to be innovated. It also
facilitates the delivery of products and services in an innovative manner to
customers. (1998). The rise of internet created banking transactions that can be
done in an innovative way.
1-
Development of
non-core business:
Recent changes in the regulatory
framework have enabled many banks to expand their services into non-traditional
banking areas For instance, many banks have already moved into, or are in the
process of moving into, insurance and stock brokerage. (1998)
Factors that affect consumers'
adoption of Internet Banking
Although the Internet has various
impacts and advantages on banking sectors, but it is worthwhile to mention that
there are many barriers face the adoption of Internet banking.
(1997)
assessed the strategic impact of Internet banking on financial services industry
and in particular the set-up and operating cost of Internet banking.
(1999) identifies security as a factor influencing customer acceptance.
Obviously, Internet banking will not be adopted unless it is considered safe and
secure by the customers. Another factor that influences the consumer adoption of
innovation is the price/cost factor. In the context of Internet banking, two
types of costs are involved. First, the normal costs associated with Internet
activities and second, the bank cost and charges. Moreover the existing mode of
service affects the adoption. In the context of Internet banking, telephone
banking and brick and mortar branches are the existing modes of transacting
banking business. Adoption of new technologies often comes across a certain
amount of resistance to change from present ways of operating. (1999) finds a
high level of customer inertia in changing their established banking
arrangements. Change ways of operating and take up new technology must fulfill a
specific need. Finally, availability of access to computers/Internet is a
prerequisite for adoption of Internet banking. The more widespread the access to
computers/Internet, the greater the possibility of use of Internet
banking.(1996) identifies lack of access to computers/Internet as one of the
possible reasons for slow adoption of Internet banking.(1999) found lack of
customer access to suitable PCs as the reason for low usage of electronic
banking in the UK and Ireland. The next part is a discussion of the different
ways to transact business with the bank. It is related to internet banking
because some aspects or benefits of such banking methods can be found in
e-banking.
Telephone banking
Telephone banking is an automated
service which enables the customer to access his or her account information and
perform the required financial operations by touch-one-telephone. In this method
of banking the client is given the capability to do banking transactions even if
they are in the comforts of their home.
Telephone banking reduces the need for a client to travel from his/her home to
the bank. It saves the energy and time most clients regard the most.
TV-based banking
(2001) indicated that
TV banking enables owners of set-top boxes to conveniently carry out their
financial transactions on television simply by using the remote control handset.
TV banking is when a TV set and the keyboard are connected to the bank via the
internet to provide the requested information.
Mobile banking
(2003) argued that Mobile
banking is when mobile channel allows customers to access financial application
virtually anywhere. In this method the mobile phone can be used to transfer
funds or check balances in the bank.
PC banking
This service depends on the
internet to transfer the information from the bank to the customer’s computer.
The most popular services offered by banks via PC are real-time fund transfers,
credit-card payments, access account balances and auto alerts. In this service
clients need to have a working computer that has the best security features.
Internet marketing
“Marketing is
Marketing, no matter what the media” In the Internet environment marketing takes
on new and challenging roles. However, it is generally recognized that
“marketing is marketing” and that, no matter which medium is being used, the
basic principles apply. The Marketing concept is also “customer based” and the
Internet customer is increasingly demanding with high expectations for easy and
convenient shopping, good prices and excellent fulfilment. From beginning to
end, the shopping and purchasing experience must be satisfying and pleasant.
High expectations are fed by the customer’s knowledge that if this site does not
satisfy, there is a competitive site. (1998)
stated that the development of the Internet and the (WWW) in the 1990s as
a means for the global sharing of information and resources has made the
traditional marketing practices obsolete. (1999), stated that through the
Internet, information can be provided instantly to potential customers anywhere
in the world, and the customer plays a more active role in the search for
information. The ability of the web to facilitate two-way communication is a
useful marketing tool. However, marketing on the Internet is not limited only to
information distribution. It also has direct selling potential. Although direct
selling is developing more slowly than the information distribution of the web,
the potential for electronic commerce is tremendous.
(2004)
defined Internet marketing or E-marketing as marketing in electronic
environments primarily on the Internet, on one or more of its services (WWW), or
offline by enterprises that produce and sell Internet-related products. Like
traditional marketing, the goal is still to facilitate exchange, build long-term
customer relationships, and create utility which is the benefit or value
received from marketing exchange. Internet marketing is performed by enterprises
that operate exclusively on the Internet) and by others that have both an online
and offline presence. Marketing is taking place in the infrastructure segment,
where the Internet is being physically built out, and through ecommerce, where
intermediaries sell products provided by other businesses and manufacturers sell
their own products. (2004) defined online marketing as a system for selling
products and services to target audiences who use the Internet and commercial
online services by utilizing online tools and services in a strategic manner
consistent with the company’s overall marketing program. (2004) indicated
that the Internet hosts many services that developed independently. Each
service also has its own software protocols that direct a particular activity.
Marketing activities occur on many of these services, in additional to the Web.
The most popular include the following:
1-
Electronic Mail (Email):
Used for the communication of messages
and permission marketing activities. Typically operates on Simple Mail Transfer
Protocol or Post Office Protocol.
2-
Usenet:
It involves Newsgroups
where users can post and respond to bulletin board messages often used for
online marketing research. Network News Transport Protocol (NMTP) facilitates
USENET communication.
3-
File
transfer protocol:
It is a service for
sending, storing, and retrieving data files, moving files from one computer to
another.
4-
Telnet:
A transfer service
that allows a user to connect directly to other computer systems on the Internet
and access stores files.
5-
Chat
or internet relay chat:
A “real-time”
communication service where users can “talk” either by text or voice can be used
for marketing focus groups.
6-
CU
See-Me:
Videoconferencing,
where users send and receive sound and pictures, can be used for marketing
research.
7-
World Wide Web:
It is where most
ecommerce and Internet marketing occur. Hyper Text Transfer Protocol (http)
governs World Wide Web functions. Also runs web mail.
Characteristics of
the Internet as a marketing tool
There are many reasons that helped in considering the internet as a marketing
tool. But only few can be considered because of its visual impact to business
and to the marketing part of business. (2001) stated that the
characteristics of the internet as a marketing tools are as follows:
-
Communication style:
The communication style is interactive,
and happens immediately there are significant time delays between message and
response.
-
Social presence:
Social presence is influenced by the
characteristics of the channel; a telephone is more personal than a newspaper
advert.
-
Consumer control or contract:
Because the consumers are able to control
the time and place at which they access the information, they are more willing
to participate in the process of getting information from a machine.
-
Consumer control of content:
If the consumers can control the content
of the message to some extent, the communication became truly interactive. An
e-mail address allows customers to ask specific questions and thus tailor the
communications.
E-Marketing mix
Just like the actual marketing concept, E-marketing has its own mix or
simplifying tool, wherein e-marketing can use marketing mix concepts to organize
the business’ strategies. According to (2002) indicated that e-marketing mix is
as follows:
1.
Site design:
Site design includes a set of important elements such as:
a.
Home
page:
Hhomepage is the most
important pages of E-store site, since it is the face of the site and gives the
first impression regarding this life and its products, policies and contents.
b.
Design and arrange other site’s page:
All site pages should be designed and
arranged, since the consumer may reach to these pages without passing through
the home page.
c.
Navigating and search bar:
This bar is an important element in
designing the web site of E-store, since the consumer can review site’s contents
through navigation and search bar. The Navigation bar serves as a central access
point that links to critical information on the site. In addition, the
navigation bar allows the information to be organized in a logical fashion. At
any point during a site visit, the navigation bar should tell the user where he
or she currently is and what subsections of the site have already been visited
to arrive at the current location.
d.
Easy
and use possibility:
Website’s management seeks to make
E-store site accessible and to be used easily. Web site design specifications
are increasingly emphasizing the following: (1) Easy Search, (2) Effective
Display, (3) Easy Purchase, and (4) Easy Tracking. These steps, which mimic some
core steps of consumer buying behaviour, are similar to store customer flow
analysis conducted by retail anthropologists (Underhill, 2000).
e.
Technological:
It uses technology, tools and systems for
the purpose of purchasing and selling operations. There are sets of
technological systems and tools used upon designing the web site such as
shopping carts, ordering systems, financial support systems and download and
distribution systems.
2.
Product:
Product is the core element of any business activity, either it was traditional
or through the internet, but purchasing or selling through the internet requires
specific basics. The brand can be used in electronic marketing. Brand is name
or term or sign or symbol or design or mix of two or more of the mentioned.
(1992) indicated the brand had four basic meaning related to products, such as
product attributes, benefits, personality and value. In e-marketing the product
can be both the tangible or intangible one wherein the internet is used to
describe aspects of the product.
3.
Pricing:
E-pricing strategy
should in line with organization business principles and strategic goals.
Information and data collection continuous operation should be made about the
targeted markets, for the purpose of determination of effective prices limits.
E-pricing flexibility process enables the organization to enhance its profits
through various methods such as accurate in specifying price levels, quick
coping with target market changes, and prices segmentation.Internet
pricing decisions will be just as important as they traditionally have been;
however, most of the frameworks did not discuss price. (1996) point out
two counteracting effects of the Internet on price. First, a supplier can use
the technology to discriminate pricing between consumers. However, if they do
not take precautions the consumers may be able to quickly find out about the
price discrimination and object to it. They suggest that taken together these
factors would lead to increased standardization of prices across borders. Also,
the ability to compare prices across all suppliers using the Internet and online
shopping services will lead to increased price competition. Finally, the price
of providing Internet-based services often contains little or no marginal costs.
Economic theory predicts that the price of a product or service will approach
its marginal cost as competition intensifies. Organizations will have to employ
new pricing models when selling over the Internet.
4.
Distribution:
Establishing of E-store on the Internet requires the existence of 24 hours a day
on the net. This requires cooperation with specialized companies in providing
site services and supplying the same with all of its technical needs. Now a days
there are many companies who provide distinguished services to business, since
these companies presents systems that allow the owner of E-store to follow up
consumers data, sales, purchases and shipping charges. The internet has change
the composition of the distribution channels, since it enhance some of
distribution factors and elements others, according to the nature and type of
product. and (1994) described the
place of e-commerce in terms of two aspects: context in which the transaction
occurs and the infrastructure that enables the transactions to occur.
5.
Promotion:
Promotion encompasses all the
various ways an organization undertakes to communicate its products' merits and
to persuade target customers to buy from them (1991).
E-promotion is a new subject, it starts
in1994. Due to the rapid development of e-business field, most of organizations
established distinguished sites on the nets. Since one of the basic requirements
to practice e-business successfully is establishing a site on the net for the
purpose of introducing marketing and selling through the Internet. There is a
set of basic tools that are used E-promotions such as: using web site as
promotional tool using search ending in promotion, using directories in
promotion and electronic advertising. (1999)
discuss these advantages in relation to the richness of information they can
provide consumers. The Internet provides a low cost way for the manufacturer to
build a direct link with the consumer. There are important limitations to
promoting on the Internet. Privacy concerns may make consumers unwilling to give
up information. Technologies such as privacy programs allow consumers to prevent
data from being collected. In addition, consumers may realize the value of this
information and demand a premium for it ( 1999).
6.
Personalization, Privacy and
Security:
Personalization in the on-line world is a term used to describe any
aspect of a web-site or web service that is tailored individually in response to
a returning customer. Usually users register with a site and create a profile.
The profile along with other information is stored in a database. When the users
return they are only shown the information that they signed up for or find
relevant. Privacy and Security: Privacy concerns top the list of
challenges for personalization. Sites have responded by crafting detailed
privacy policies and posting them on the web site. A typical privacy policy
addresses what information is being collected and how it will be used and
whether the information will be sold or shared with third parties and if so in
what context. ( 2002)
The Arthur E-Marketing Model:
(2004)
indicated that Presented a model that expressed the electronics marketing cycle,
‘this cycle consists of four basic stages:
1.
Preparation phase:
Consumer’s needs and desires are determined in this phase and the same is
applied on attractive and visible targeted markets. In this phase the nature of
competition within the industry is also determined. In order to succeed in the
above, the matter required a collection of needed data and information. For
this purpose the organization refers to collect all data and purpose the
organization refers to collect all data and information via Internet by using
marketing research methodology and by referring to professional centres in
marketing research via the Internet. The organization also uses traditional
tools and means to collect data and information.
2.
Communication phase:
Communication is important between the client and the company to inform the
client about the product and services the company can offer. The organization in
this phase achieves the communication process with the consumer to make him/her
receive the new products introduced to electronic market via the Internet. This
phase consists of four sub phases:
b.
Attention:
Various means are used
to attract the consumer. The most important tools and means are advertising
banners and E-mail messages.
c.
Providing needed information phase:
In this phase the
information need by the consumer is prepared, which helps him to build up a
private opinion about this new product.
d.
Invoke desire phase:
This phase
concentrates on the consumer desire for the success of desire presentation and
introduction process should be effective, by the use of multimedia technology.
e.
Action phase:
As a result of the above mentioned
phases, if the consumer in convinced with the introduced product via the
Internet then he makes the purchasing action.
3.
Transaction phase:
This phase expresses
the transaction process made between the seller and the buyer. The seller
(organization) provides the required products in quantities and time and the
purchase the required price.
4.
After-sales phase:
The organization should not be satisfied with sales process. It should maintain
effective relations with the buyer, since marketing process did not stop on
acquiring and attracting new consumers.
Advantages and Disadvantages of on-line
marketing
On line marketing has
its advantage and disadvantage. Both the advantage and disadvantage can affect
marketing decisions made by a company. It can alter the future of the company in
a positive or negative way. Buyers and marketers can benefit from On-line
marketing. (2004) stated that online services can offer these benefits to
consumers and marketers:
1-
Convenience:
Customers
can order products from the comfort of their home or office 24 hours a day, 7
days a week.
2-
Information:
Computers
can store and display reams of product descriptions and prices, much more
information than can be found in a billboard, newspaper or magazine ad, TV
commercial, radio spot or even a catalogue.
3-
Respond to market conditions:
Companies
can quickly add products, descriptions and prices and keep them up-to-date.
4-
Reduce printing and postage costs:
Production
costs for digital catalogues are far less than printing and mailing catalogues.
5-
Reduce expenses:
Online
stores don’t carry the huge expense of traditional storefronts, with rent,
utilities and insurance.
6-
Fewer
hassles:
Consumers
don’t need to deal with pushy salespeople.
7-
Build
relationships:
Merchants
can interact with consumers to create dialogues that lead to long-term
relationships
Meanwhile, some online services also provide various benefits to marketers such
as:
1-
Quick adjustments to market conditions:
Through online marketing any company can
quickly add products to its offer, change prices and even descriptions.
2-
Lower costs:
With online marketing the company can
avoid the expenses of having a store and the costs of rent, insurance and
utilities. A company can produce digital catalogues for much less than the costs
of printing and making paper catalogues.
3-
Relationship building:
A company’s sales force can exchange
ideas with different costumers and learn from them.
4-
Audience sizing:
A company can learn how many people
visited its on-line site and how many stopped at particular places on the site.
With such information a company can improve offers and ads. (1998) (2000)
indicated that online marketing has five advantages. The first one is that both
small and large companies can afford it; second, there is no limit on
advertising space compared with other types of media; third, information access
and retrieval are quick, if compared with mail or face; fourth, the consumer can
perform his shopping in private; and finally the firm’s site can be visited by a
customer in any place in the world. More-over, online marketing is not for every
company or every product. The internet is useful for products and services where
the buyer seeks greater ordering convenience, or lower costs. The internet is
also useful when buyers need information about feature and value differences. It
is worth while to mention that online marketers face a number of challenges:
2-
Limited consumer exposure and buying:
The web users are doing more surfing than
purchasing; most of online buyers are business rather than individual consumers.
3-
Skewed user demographics and psychographic:
Users of online marketing are more
upscale and technically oriented than the general population making them ideal
for computer, electrical and financial services
4-
Chaos and clutter:
The internet offers a huge number of web
sties. Therefore navigating the web can be frustration, consequently many
websites go unnoticed
5-
Security:
Consumers worry about their credit card
numbers, which companies worry that others will invade their computer systems
for espionage or sabotage purposes
6-
Ethical concerns:
Consumers worry about their privacy,
because companies might make unauthorized use of their names and other
information ( 1998).
Ethical Issues
The use of the internet, e-marketing, and e-banking
has brought out different ethical issues. One ethical issue is the lost chance
for the client to physically interact with SABB in their transactions. The
client loses the chance to have emotional attachments to the business he/she
transacts with. Another ethical issue is whether the information on the
e-marketing system should remain private or be publicized. The company cannot be
blamed for some personal information being leaked online but it must make sure
that the system used in e-marketing will be secured.
Chapter Three
Industry Review
In this chapter we will
discus the historical back ground of the SABB in addition to the services the
bank provides through the Internet. This chapter will also provide the different
banking services provided by SABB.
Banking in Saudi
Arabia
Saudi Arabia’s
commercial banking system looks similar to Kuwait's, but its formal
concentration ratio is lower suggesting a greater potential for competition.
Saudi Arabia has ten banks, including a very profitable Islamic one, which is
also the world largest of this type of enterprise and the fourth largest of the
kingdom's commercial banks. The largest Saudi bank had only 23 percent of
deposits in 1997, and the top four held 60 percent. Except for the smallest of
the ten, all appeared healthy and profitable, but information on their spreads
is not available. Saudi Arabia's financial system in reality, however, is not
fully open to competition. For at least a decade two major conglomerates of
Islamic banks have attempted without success to establish commercial banks in
Saudi Arabia. Each of them is Saudi-owned, one by a son of the late and
the other by a self-made businessman. Saudi Arabia's stock market is also thin,
despite its relatively high capitalization (2001).
Moreover, five
specialized state lending agencies still offer concessionary lending for most
kinds of private sector business activity, and their outstanding loans in 1998
were about 31 percent of GDP, or almost as much as those of the commercial banks
to the private sector. Despite the structural power of capital evident in the
commercial banking system, Saudi politics are much less open than Kuwait's,
Morocco's, or Jordan's. One reason why civil society in Saudi Arabia has yet to
emerge strongly from this material base is that much of that base remains under
the direct or indirect influence of the Saudi ruling family and . The Saudi
family, moreover, is far larger than its royal counterparts elsewhere and exerts
much more direct control. Nevertheless, the existence of a substantial material
base upon which civil society ultimately could draw suggests some potential for
political as well as economic liberalization in the future ( 2001).
By the middle of the boom decade,
state lending institutions in Saudi Arabia, coffers bursting at the seams with
oil revenues, had taken over virtually all medium- and long-term lending in
construction, agriculture, and industry. Wedged between state banks and
exchangers, the activities of commercial banks in Saudi Arabia shrank to
short-term trade finance, construction guarantees, and overseas placements (
1997). The banking industry in Saudi Arabia is modernized and updated with the
changes in the environment. The banking industry in Saudi Arabia is continuously
improving and undergoing various changes.
SABB
historical Background
The British Bank of the
Middle East, opened branches in
Jeddah and
Al Khobar in 1950.
The first branch in particular depended for its profits on the
Hajj season. While
the second branch clients were mostly new foreign oil workers. Hong Kong and
Shanghai Banking Corp (HSBC) acquired The British Bank of the Middle East in
1959, but kept the British Bank of the Middle East name, which by that time was
well-established. Public complaints about high bank charges and poor service
rendered by two local banks forced the authorities to take action in the
mid-1970s. Furthermore,
Islamist and
nationalistic elements were criticizing the authorities for permitting foreign
banks to operate at all on Saudi Arabian soil. Therefore the authorities decided
to try to satisfy all critics by Saudizing the foreign banks, but at the same
time permitting them to expand their branch networks to create a more
competitive banking environment. The Saudiization was carried out by offering
60% of the shareholdings of the domestic operations of the foreign banks, such
as the British Bank of the Middle East, which became the Saudi British Bank, to
local private citizens, and letting the parent company retain the remainder.
(November 2005)
The Saudi British Bank (SABB) is
a Saudi Joint Stock Company established by Royal Decree number M4 dated
Safar 12 1398(AH)
(January 21,
1978). The Bank
formally commenced activities on Rajab 26, 1398 (AH)
(July 1, 1978) with the taking over of the operations of The British Bank of the
Middle East in the
Kingdom of Saudi Arabia.
SABB operates under Commercial Registration 1010025779 dated 22, 1399 (AH)
(October 13, 1979) as a
commercial bank
through a network of seventy-three branches including thirteen women's branches
that are staffed exclusively with women and that deal exclusively with women.
SABB is an
Associate company of the HSBC Group, one of the world's largest banking and
financial organizations, with some 9800 offices in 77 countries and territories
in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.
The bank offers services in investment banking, commercial banking, private
banking and Amana Islamic banking. The Bank's customers can, through contacting
any branch office, gain access to the HSBC Group's global network, its
resources, skills, specialist knowledge and expertise. SABB is incorporated in
the Kingdom of Saudi Arabia, with its head office in Riyadh. Saudi British
Bank (SABB) became the first Saudi bank to be awarded an "A" credit rating by
Fitch Ratings during the third quarter of 2005. Its performance during the third
quarter lifted its net profits for the first nine months of 2005 to of SR1,874 m
(US$500 m), an increase of 50.8% compared with the same period of 2004. SABB
loans and advances to customers stood at SR39.6 billions (US$10.6 b) at the end
of September, up by 34.6% compared with end-September 2004, and customer
deposits, at SR45.6bn, were up by 15.7%. Total assets were SR67.4bn, an increase
of 28.7% since the end of the third quarter of 2004.
The SABB Services
A number of major Asian banks maintain
branches and offices in Bahrain, which serves as the major financial centre for
the Gulf Cooperation Council (GCC). The Habib Bank of Pakistan maintains a full
branch and an offshore banking unit on the island, the branch providing retail
services to the local Pakistani community, while the offshore unit is concerned
with raising funds for projects in Pakistan and securing trade finance. The
National Bank of Pakistan, the Muslim Commercial Bank of Pakistan and the State
Bank of India also maintain offshore banking units in Bahrain, and in 2001
Malaysian Banking Berhad (Maybank) opened an offshore unit for its GCC business
( 2004). Leading multinational banks with a significant presence in South and
South East Asia also maintain offshore banking units in Bahrain, notably the
Australian and New Zealand Banking Group (ANZ), Standard Chartered Grindlays
Bank and the Hong Kong and Shanghai Banking Corporation (HSBC). The latter owns
a 40 per cent stake in the Saudi British Bank that it acquired when it took over
the British Bank of the Middle East ( 2004).
After the oil price rises of the
mid-1970s and the greatly expanded volume of funds in the Saudi Arabian
financial system, there was pressure from the foreign owned banks to expand
their branch networks, partly to serve the financial needs of the expatriate
community, and finance imports from their countries of origin. The government
was reluctant to permit the expansion of foreign banks, partly because it was
concerned with criticism from religious leaders about interest-based
institutions having an ever more visible presence in the heartland of Islam. The
government's solution was to pass the Bank Saudization Act in 1976, stipulating
that the foreign banks had to incorporate within the kingdom and offer 60 per
cent of their shares to local citizens. Hence, First National City Bank became
Saudi American Bank, British Bank of the Middle East became Saudi British Bank
and Banque de l'Indochine became Saudi French Bank ( 2003).
Unlike the former foreign banks, the
Saudized institutions were allowed to expand their branch networks. As
competition for deposits grew, savings accounts were introduced which paid a
percentage return, although this was not described as interest. Savings accounts
only accounted for less than ten percent of total deposits in 1978, 54 but, by
1990, the proportion had increased to over half (2003). SABB offers services in
investment banking,
commercial banking,
private banking,
and Amanah
Islamic Banking.
The later service is regulated by the Saudi Arabian Monetary Agency and Shariah
Supervisory Committee. It ensures that The Saudi British Bank is the leading
provider of value added Islamic financial products and services to its
customers. Amanah is committed to providing innovative Islamic Products to its
customers.
The need for better
services
The value chain makes
sure that all aspects like firm infrastructure, human resource management,
technology development, procurement, service, marketing and sales, outbound
logistics, operations and inbound logistics are interrelated into achieving the
firm’s goals. Each aspect is important for the firm to succeed; when one aspect
is neglected a chain of reaction ensues. SABB makes sure that it monitors the
value of it services from all over the world. It sees to it that the services it
offers to clients in other places are given the appropriate value it should
have. One improved service for the company is the use of online services.
SABB on line services
The Saudi British Bank
(SABB) installed a number of ATMs in Riyadh and Mecca to serve visually impaired
customers. The specially modified ATMs will enable these customers to conduct
their transactions with complete privacy, security and independence. This
service which has been pioneered in the Kingdom and voice operated machines have
already been installed at the in Riyadh and the in Mecca. SABB has taken the
initiative in introducing this service in Saudi Arabia due to its resolve to
address the unique needs of the visually impaired. Now, this special group of
customers who face a number of obstacles in accessing new technologies, as
exemplified by ATMs, will also be able to benefit from them. "SABB is keen to
expand this service and work is underway to install another machine at the
Moreover (SABB) also provide it customers with the possibility of paying online
STC and credit card bills, in addition to other pre-registered payments, over
both SABBNET, the Bank’s internet banking service, and SABB Direct, its
telephone banking facility. SABB has been at the forefront in utilizing cutting
edge technology to make banking convenient for its customers. With the
introduction of online payments our customers can now avoid time consuming
visits to the branches for these transactions”. In addition to bill payment,
through SABBNET and SABB Direct the Bank’s customers can effect money transfers,
obtain information on their accounts and credit cards, request account
statements and cheque books, follow up currency exchange rates, etc. SABB
customers who already use the SABB Direct service can register online for
SABBNET without any paperwork. PIN. Furthermore the Saudi British Bank (SABB)
launched a low limit Internet Card to facilitate convenient shopping for its
customers at more than two million sites on the Web. This Card is designed for
use on the Internet only and cannot be used at ATMs or commercial outlets. The
SABB Internet Card is a modern service that provides convenience, and expedites
Internet shopping. The low credit card limit minimizes the risks of any misuse.
Furthermore, it represents an additional service to SABB credit card holders.
)One of the distinguished services the Saudi British Bank (SABB) provides its
customers with is the Al Amanah Islamic Charge Card. The Al Amanah Card is a
charge card which allows purchase of goods and services under easy terms for a
fixed period. The Card is available to all SABB customers holding current or
savings accounts or investments in the Bank’s investment funds. (SABB, yearly
report, 2001) Recently the Saudi British Bank (SABB) is providing subscription
through electronic channels (Internet, Telephone Banking and ATMs) as well as
through branches to facilitate the subscription process for subscribers.
Customers who had
previously subscribed through SABB may benefit from this service through
Internet around the clock from anywhere in the Kingdom or abroad by visiting
SABB website. SABB electronic services had been extensively used during earlier
subscriptions particularly in the light of the increasing number of customers
using the Internet in their banking and other investment needs. Customers may
also effect their subscriptions through the Direct Banking Service using the
toll free number 800-124-8888 as well as through other conventional channels by
completing and lodging application forms at customer service personnel. SABB
had been a pioneer in launching advanced electronic services that facilitates
subscription processes. Among those launched services were subscription through
ATMs, for the first time in the Kingdom and the self registration, also for the
first time through SABB electronic website which facilitates self registration
and entry of subscribers details for participation in the IPOs launched in the
Saudi market. ( 2005) Electronic banking is one of the first things that come to
mind when one thinks about the future of banking. It includes automated teller
machines (ATMs), automated call centers, digital cash, Internet banking, screen
telephones, and so on. These channels of delivery can be used for presenting and
paying bills, buying and selling securities, transferring funds, and providing
other financial products and services.
Few very large banks
were the most active in offering Internet services. These banks served a small
but growing number of their customers (2003).The low percentage of customers and
the modest cost of setting up an Internet banking web site make it unlikely that
Internet banking is having a major influence on the profitability of most
institutions, with the exception of the largest ones ( 2003). Unfortunately most
customers do not want to totally relinquish use of the branch and phone. Thus,
banks have been unable to close as many branches as they had originally
anticipated. Added to this is the cost of hiring technologically astute
personnel capable of running the more advanced operating systems, not to mention
the need for additional advertising promoting the Internet banking system (
2003). E-banking helps SABB sell to clients by providing it with the capability
to do business with the bank even after working hours and the clients can do it
in places they deem comfortable to use the computer and the internet. E-banking
makes selling easier for SABB through increasing the speed of transaction. In
this e-commerce trend no specific software is needed by the client in operating
the internet banking technology but there are major risks in terms of security
of the information divulged by the client since the internet can at times be
prone to attacks and hacking.
Chapter
Four
Research Methodology
Introduction
This chapter will give a discussion of the different
methods and procedures used and done in the study. In this part the different
techniques used in the research method will be discussed to give explanation of
its purpose to the study. This chapter will discuss the research method; this
chapter will also give a description of the research method. The research aims
to investigate the use of e-marketing in SABB and the restrictions SABB face in
implementing e-marketing in its selling activities.
The study will make use of positivist
approach. The positivist approach to research has prided itself on the notion
that the investigator is objective during the experiment. The positivist
approach to research follows the so-called scientific method. Steps taken to
create this method are to state a research question, develop a hypothesis,
develop a research design, collect data, interpret the data, and accept or
reject a hypothesis. A pure positivist approach is deductive. Within this
approach researchers will find experimental design, quantitative data, and
statistical methods ( 2000).
The positivist
approach is oriented toward verifying what has been already discovered by other
methods. The alternate paradigm, and the phenomenological position within it, is
oriented toward discovery of salient propositions. Discovery of propositions by
observation and the careful inspection of the patterns which emerge from the
data are the hallmark of the phenomenological approach. In the positivist
approach to research the observer or the observer’s instruments are objective or
potentially objective ( 1994). The research is also exploratory in nature and
based on the study of positivist phenomena, therefore the researcher intends to
use a positivist methodological approach. This stems from the fact that the
study is empirically grounded and is being undertaken to gain more understanding
of the issue from an objective point of view. This point of view is being taken
to minimize personal prejudice and bias.
This study used a qualitative and quantitative research.
Qualitative research seeks an in
depth information about E-marketing in terms of definition, advantages and
disadvantages and barriers to the Internet widespread adoption in Saudi Arabia
banks. Qualitative research designs in the social sciences stem from traditions
in anthropology and sociology, where the philosophy emphasizes the
phenomenological basis of a study, the elaborate description of the meaning of
phenomena for the people or culture under examination. Often in a qualitative
design only one subject, one case, or one unit is the focus of investigation
over an extended period of time ( 1998). Qualitative research is multi method
in focus, involving an interpretive, naturalistic approach to its subject
matter. This means that qualitative researchers study things in their natural
settings, attempting to make sense of, or interpret, phenomena in terms of the
meanings people bring to them. Qualitative research involves the studied use and
collection of a variety of empirical material such as case study, personal
experience, introspective, life story, interview, observational, historical,
interactions, and visual texts on the described routine and problematic moments
and meanings in individuals' lives. Observation is the most frequent
data-collection method used in qualitative research. Observation has greater
face validity than a second-hand account gathered either through interviewing or
document study ( 1998). Qualitative research intends to find theories that would
explain the relationship of one variable with another variable through
qualitative elements or components in research. These qualitative elements do
not have standard measures; rather, they are behaviour, attitudes, opinions, and
beliefs. The qualitative research is described as multi-method in focus,
involving an interpretative, naturalistic approach to its subject matter. This
means that a qualitative researching procedure acts on studying things in their
natural settings, attempting to make sense of situations, or interpret events in
terms of the meanings people bring to them.
Surveys and
experiments are probably the main vehicles of quantitative research. The
analysis of previously collected data, like official statistics on crime,
suicide, unemployment, health, and so on, can be subsumed within the tradition
of quantitative research. Quantitative research is a genre which uses a special
language which appears to exhibit some similarity to the ways in which
scientists talk about how they investigate the natural order of variables,
control, measurement, experiment. This superficial imagery reflects the tendency
for quantitative research to be under-pinned by a natural science model, which
means that the logic and procedures of the natural sciences are taken to provide
an epistemological yardstick against which empirical research in the social
sciences must be appraised before it can be treated as valid knowledge ( 1992).
The epistemology upon which quantitative research is erected comprises a litany
of preconditions for what is warrantable knowledge, and the mere presence of
numbers is unlikely to be sufficient. Nor is it the emphasis on accumulating
quantitative data by those working within the tradition that the critics of
quantitative research find unacceptable ( 1992). Quantitative research’s goal is
to make use of mathematical data to understand natural phenomena. Quantitative
research develops instruments and methods for measurement; create experimental
control and manipulation of variables; collect empirical data create Models to
analyze data and use such model to evaluate results. In some instances
Quantitative research allows the use of proxies as temporary replacements for
quantities that cannot be directly measured. The proxies only reconfigure a
certain amount of the variance of the original quantities.
Quantitative research methods permit a flexible approach to gathering
data. In this method the choice and design of methods are constantly modified
during data gathering based on continuing analysis. This gives way for creation
of an investigation of important new issues, concerns, probabilities and
questions as they arose. The aim of this quantitative research is to learn about
how Saudi British Bank and people use the Internet to learn about the
applications of the Internet in Saudi Arabia, to explore the barriers that
prevent using the Internet entirely to do E-marketing, to learn the worries of
the people from using the Internet. The study used quantitative research method
so as to permit a flexible approach. The choice and design of methods are
constantly modified during data gathering based on continuing analysis. This
will give way for creation of an investigation of important new issues,
concerns, probabilities and questions as they arose. Quantitative research is
the one that should be used because the data that would be acquired from this
method is measurable and can be given appropriate analysis. Through quantitative
research surveys and questionnaires can be used to gather data.
Data Collection
(1997)
indicated the data collection involves the actual process of acquiring the data
needed for analysis. It can take a variety of forms but in any form it will
involve both primary data collection and the use of secondary data. Secondary
data are always collected first because of their time and cost advantage this
research was mainly based on two methods of data collection, in the secondary
and primary data collection methods. Acquiring secondary data are more
convenient to use because they are already condensed and organized. Moreover,
analysis and interpretation are done more easily. These additional data and
information will also be used to support as well as contradict the findings of
the study depending on the credibility of the authors and the journals where
they were found published.
Secondary
data collection
(1996) indicated the reasons for using secondary data are as follows:
1-
Difficulty, time consuming and expensive of collecting primary data compared
with secondary data.
2-
Lack
of enough data.
3-
Secondary data may confirm, modify or contradict the research’s findings.
4-
Secondary data allows the researcher to concentrate his attention on analysis
and interpretation.
The secondary data
will come from the academic materials and research publications that are
significant to the research. The main sources used in collecting secondary data
are: Technical publications, Books and Journals, trade Association data, private
data service and computer databases. Books and Journals, government
publications, records and computer database are the most used in general (S
1996). The main sources that were used in this research are” Books, Journals,
banks' publications, and Internet”.
Primary data collection
Primary data can be collected by
various methods such as: observations, laboratory measurement, telephone
interviews, mail interviews, personal in home survey, personal mail survey and
personal or online questionnaires.
Primary data will be the responses of the employees belonging to different
departments of the selected organization. The survey method will be facilitated
through the use of questionnaires. This will include inquiries on the general
characteristics, particularly the socio-demographic information of the selected
research participants. Quantifiable inquiries will be likewise contained in the
survey forms. Questionnaires are
used because it does not require as much effort from the questioner as verbal or
telephone surveys. The questionnaire method often has standardized answers that
make it simple to compile data.
Questionnaires are one of the most widely used survey data collection techniques
because each respondent is asked to respond to the same set of questions, if
provides an efficient way of collecting responses from a large sample prior to
quantitative analysis. The survey method’s advantage is it being a written proof
of how the data were gathered from the clients. This method also takes lesser
effort since the researchers don’t have to talk to the respondents one by one.
According to (1998) questionnaires are the most appropriate method in the
following cases:
-
Use of large number of respondents in
different locations.
-
If the social climate is open enough to
allow full and honest answers.
-
If there is a need for standardized data
from identical questions without need have face to face interaction.
-
If the time allows for delay.
-
If the resources allow for costs.
-
If the addressed respondents are able to
read and understand the questions.
Based on the above
reasons the questionnaire was used
to collect primary data.
Questionnaire design
The information obtained from the
secondary data was used to construct a questionnaire, to gather quantitative
information about e- marketing in SABB. Self-administrated questionnaire was
used because the intention is to meet the respondents. The advantage of this
method is in its flexibility of data collection where the researcher and the
respondents meet face to face; the researcher can administer complex
questionnaires because he can clarify and explain difficult questions, the
ability to reach the sample effectively and efficiently and the ability to
control the environment of data collection .The questionnaire was made up of 3
parts. The first part aimed to collect demographic information, the second and
third part includes the related statements based on five points Likert-scale in
order to specify the level of agreement or disagreement for each statement from
strongly disagree (1) to strongly agree (5). A letter accompanied the
questionnaire for the purpose of explaining all salient points. The Arabic
version of the questionnaire with a proper covering letter was distributed to 64
bank's employees. The distribution of the questionnaire was made in person.
Respondents were requested to answer the questionnaire statement accurately.
Questionnaires were collected by the researcher. Sixty four questionnaires were
collected. The response rate was 100%.
Population and Sampling
The study will use
the probability sampling because the results of the use of such method will not
be of limited value. In probability sampling method each member of the
population has non-zero probability of being selected. The specific sampling
technique that will be used is the random sampling. This sampling method makes
sure that there is equal probability for each subset sample of frame. This
method makes sure that the sample will not be completely random. The sample size
was a minimum of five participants. The research population consists of
all banks employees in Saudi Arabia. Due to the difficulty to reach the banks
branches in Saudi Arabia .Saudi British Bank employees in Riyadh the capital
were selected as research sample. The researcher was able to reach (64)
employees all of which from Riyadh central office and
branches. The participants in the study
will be different people that have an idea on evaluating the impact of internet
banking to SABB. The participants were carefully chosen so that the study can
distinguish all the characteristics and issues by the participants. The
rationale for the use of such participants is based on the fact that the
employees working in SABB have sufficient experience and knows how to evaluate
the impact of the internet technologies to their business. These kinds of
workers have an idea on how the business economy is affected by the change in
technology. This part of the research about the impact of internet banking to
SABB is important because the data needed to fulfil the objectives of the
research will only be supplied by the participants. The opinions of the
respondents are needed because they have the idea of what the advancements in
internet systems do to the business. The respondents have experienced various
changes in the banking sector thus they can compare the different changes to the
sector with the effects of the changes in internet technology. The respondents
also have the idea of what things can benefit the sector and what will give more
problems to the sector.
Validation of the Instrument
To validate the
instrument used, the researcher pre-tested a sample of the set survey
questionnaires. This was done by conducting an initial survey to at least five
participants. After the respondents have given their answers to the
questionnaire, they were asked to cite the parts of the questionnaire that needs
amendment. Afterwards, the content of the survey questions was reanalyzed to
remove the unnecessary questions.
Analysis
Techniques
All gathered raw data through out the questionnaire
where coded and analyzed through the use of the SPSS 11.0 (Social Packaging
Statistical System) software for Windows. Two statistical techniques were used
in this study. The first one was descriptive statistical analysis, which
includes frequencies and percentages to present the main characteristics of the
sample. The second was t test; these tests are believed to be the most
appropriate tests and therefore, it has been employed.
Chapter
Five
Analysis
and Discussion
Introduction
This chapter aims to analyze the data collected by the questionnaire; the
questionnaire was addressed to SABB employees in Riyadh, capital of Saudi
Arabia. After data collection the next thing to be done is data presentation,
interpretation and analysis. It is important that the research output be
presented in an organized, coherent and understandable manner so that those who
will read the research can propose important decisions about the results of the
study. This chapter intends to discuss the information acquired from the survey
and interview done for the research. This part of the study is divided into two
parts. The first part intends to give information about the respondents
particularly with regards to their age, gender, educational level and years of
experience in their current work. The second part intends to give information
about the ideas of the respondents pertaining to the attitudes and experiences
of E-marketing as marketing and business communication tool. The second part
will also show the probable restrictions in the use of e-marketing.
The demographic profile of the sample
The demographic profile will be helpful in determining
the level of ideas of the respondents. The demographic profile will help in
determining what kind of perspective the respondent has. The demographic profile
will also show how reliable the information that will be shared by the
respondents. The analysis of the data gathered through the self administrated
questionnaire of the responding sample revealed the following results in terms
of sample, gender, age, educational level, and experience:
Table (1) Sample's Demographic
Profile
|
Sex |
Frequency |
Percentage |
Male
|
60 |
93.6% |
Female
|
4 |
6.4% |
Total
|
64 |
100% |
|
Age |
25
years or less
|
8 |
12.5% |
26-35
years
|
20 |
31.3% |
36-45
years
|
28 |
43.6% |
|
46+ |
8 |
12.5% |
|
Total |
64 |
100% |
|
Educational level |
Under
graduate
|
8 |
12.5% |
Graduate
|
42 |
65.6% |
Postgraduate
|
14 |
21% |
|
Total |
64 |
100% |
|
Experience |
1 year
or less
|
14 |
21.88% |
2-5
years
|
18 |
28.13% |
6-8
years
|
8 |
12.5% |
9 year
+
|
24 |
37.5% |
|
Total |
64 |
100% |
Based on the above analysis the following results were obtained:
-
With respect to sex, respondents were
93.8% males and 6.3% were female. This demonstrates the fact that women are
not so much involved in banking industry, and the majority of employees are
males to the local culture. It shows that the perspective of the study will be
from a man’s perspective.
-
As to the age of the respondents.12.5%
were under the age of 25 years, 31.3 percent were between the ages 26-35
years, 43 percent were between the ages 36-45 years, and 12.5 percent were
above the age of 46 years. This means that the majority of the responding
sample was between the ages of 36- 45 years.
-
As for the educational level of the
respondents, 12.5 percent were undergraduate, 65.6 percent were graduated, and
21 percent were post graduated. This means the majority of the sample had at
least graduated from a university. This group of respondents will give the
study a perspective that is based from the notion of learned individuals.
-
As for experience 21.88 percent had one
year experience. 28.13% percent of the sample had an experience that range
between 2-5 years, 12.5 percent between 6-8 years and 37.5 percent had 9 years
or more. The participants of the study have been in the industry for a long
time and have experienced many things that can contribute to determining the
impact of e-marketing to SABB. The participants of the study have been working
in the banking sector for more than 9 years thus they have a lot of ideas
regarding what technologies are the best for the industry.
This next part
concentrates on the participants responses towards different issues in the
study. Descriptive analysis were used to find out the means and the standard
deviations of the sample's responses regarding using e-marketing in selling
activates
Table (2)
Means and standard deviations of Sample's responses regarding
using e-marketing in selling activities:
|
No. |
Question |
Mean |
S.Deviation |
|
1 |
The bank has its
own web site |
4.72 |
0.523 |
|
2 |
The banks
consumer has the facility to communicate with the bank via the Internet |
3.94 |
0.982 |
|
3 |
The bank
provides the consumer with the possibility to make applications for core
banking services |
4.13 |
0.871 |
|
4 |
All bank's new
services are shown on the site |
3.68 |
0.833 |
|
5 |
The bank
encourages its consumers to use its web site |
4.03 |
0.897 |
|
6 |
The bank web
site is used as a facilitator for payment purposes |
3.97 |
0.861 |
|
7 |
SABB provides
its new services free of charge |
3.97 |
0.782 |
|
8 |
SABB uses its
web site to promote its services |
3.94 |
0.801 |
|
9 |
The Bank uses
the Internet for its permanent advertisement |
3.59 |
1.012 |
|
10 |
Bank's web site
is used to strengthen its brand name |
3.84 |
0.884 |
|
11 |
Bank's web site
is used as a shopping centre for its various financial products |
3.47 |
0.915 |
|
12 |
SABB uses its
web site for publicising its services |
3.97 |
0.740 |
|
13 |
Bank's web site
is used fro the purpose of enhancing bank's competition |
3.94 |
0.840 |
|
14 |
Bank' web site
is used as banking services delivery channel |
4.00 |
0.718 |
|
15 |
The bank is
using the web site to cop with fluctuations in services demand |
3.88 |
0.660 |
|
16 |
Bank's web site
is used to face competition pressures |
4.09 |
0.893 |
|
17 |
The bank use
its web site to achieve cost and efficiency gains |
3.84 |
0.847 |
|
18 |
The banks is
using its web site to build good relation with its consumers |
4.00 |
0.803 |
|
19 |
The bank
provided a large number of services through the web site. |
3.78 |
0.906 |
|
20 |
Web site is used
to develop new services. |
3.75 |
1.077 |
|
21 |
The web site is
used to meet consumers needs |
3.63 |
0.975 |
|
22 |
Bank's services
are performed quickly through h the web site |
3.88 |
0.942 |
|
23 |
SABB use e-
marketing as a tool or increasing its market share |
3.78 |
0.792 |
|
24 |
E- marketing is
used to provide targeted market needs |
3.66 |
0.827 |
|
25 |
E- marketing is
used by the bank to fulfil its obligations towards its environment
|
3.47 |
0.915 |
|
|
Average |
3.89 |
0.823 |
In terms of sample's responses regarding the use of e- marketing in selling
bank activities, the table above indicates that the average mean is 3.89 this
indicates that SABB is using e-marketing in its activates. The statement means
were ranging between (3.47 and 4.72). Such results indicate that the sample
agreed on all statements mentioned in table above, which measure the extent of
using e-marketing in SABB banking service selling activities. Furthermore it
can be noticed that statement “the bank has its own web site" has the highest
mean of all 25 statements. The statement: the bank provides the consumer with
the possibility to make applications for core banking services". Ranked the
second, statement:" Bank's website is used to face competition pressures" ranked
the third. Such results indicate that e-marketing is used by SABB widely in
selling activities such as promotion, and distribution in addition to product
improvement. The result contributes with the abovementioned theory regarding the
benefits of internet. It provides more specific use of internet of the banking
industry.
Table (3)
Means and standard
deviations of Sample's responses regarding restriction of using e- marketing in
selling activities:
|
No. |
Question |
Mean |
S.Deviation |
|
1 |
Security
concerns |
4.03 |
1.062 |
|
2 |
Prices of New
technologies |
3.53 |
0.879 |
|
3 |
Existing mode of
services |
3.53 |
1.077 |
|
3 |
Lack of access
to internet |
3.44 |
0.801 |
|
5 |
Lack of
awareness of internet service and its benefits |
3.63 |
1.008 |
|
6 |
Governmental
regulation |
3.56 |
1.014 |
|
7 |
Lack of
technology know how |
3.50 |
1.136 |
|
8 |
Bank's internal
regulations |
3.59 |
0.946 |
|
9 |
The need for
different skill of staff |
3.53 |
0.983 |
|
10 |
Vast cost and
effort to develop network |
3.47 |
1.077 |
|
11 |
Lack of privacy |
3.13 |
1.070 |
|
12 |
Fear of
distraction and possible mistakes in transactions |
3.25 |
1.191 |
|
13 |
Consumer's
preference to associate a bank transaction with human interaction
|
3.22 |
1.099 |
|
14 |
Reading
difficulties of Internet bank site by consumers |
3.34 |
1.096 |
|
15 |
The continuous
need for invention of new services |
3.47 |
1.077 |
|
16 |
Lack of top
management support |
3.44 |
1.105 |
|
17 |
Consumers'
computer literacy |
3.44 |
1.045 |
|
18 |
Lack of Internet
service providers |
3.13 |
1.238 |
|
19 |
Having an
International brand name |
3.31 |
1.061 |
|
20 |
Lack of having
effective information system |
3.50 |
0.950 |
|
21 |
Language
restriction |
3.25 |
1.218 |
|
22 |
Lack of required
infrastructure |
3.22 |
1.070 |
|
|
Average |
3.43 |
0.722 |
In terms or restriction in using
e-marketing in SABB bank services selling activities, table above indicates
that the mean is (3.43), which indicates in general that the sample agree that
there are some restrictions in using e-marketing in banking industry in Saudi
Arabia. Other statements are ranging between (3.13- 4.03), this result also
confirms the sample's view that using e-marketing face some restrictions. It and
furthermore it can be noticed that: "security concern". Is the highest
restriction the bank face, while lack of alarms of internet service ranked the
second, and: "Bank's internal regulations ' ranked the third." Lack of internet
providers ranked the last. One of the abovementioned factors that limit the
growth of the internet is the cost for installation and maintenance of the
internet, as was seen in the study the cost of the new technology is included at
the top of the list of those factors that prevent in implementing e-marketing
systems.
Hypothesis Test
Hypothesis No .1:
H1: SABB do use
e-marketing in its selling activities
Ho: SABB don't use e-marketing in its selling activities
To test this hypothesis a T-test was used, table below
indicate the obtained results:
Table (4)
T- Test results of hypothesis no .1
|
Mean |
T calculated |
T- tabulated |
Sig |
|
3.89 |
15.315 |
1.993 |
0.000 |
Table above indicates that value of T calculated is more than
T- tabulated, and Sig –t is less than (0.05), therefore we reject the null
hypothesis and accept the alternative one. This means that SABB is using
e-marketing in its selling activities.
Hypothesis No .2:
H1: SABB face many
restrictions in implementing e-marketing technology
Ho: SABB face no many
restrictions in implementing e-marketing technology
Table (4)
T- Test results for hypothesis no. 2
|
Mean |
T calculated |
T- tabulated |
Sig |
|
3.42 |
4.821 |
1.993 |
0.000 |
Table above indicates
that value of T calculated is more than T-tabulated, and Sig–t is less than
(0.05), therefore we reject the null hypothesis and accept the alternative one.
This means that SABB face many restrictions in implementing e-marketing
technology: Each restriction affects the respondent’s perception of e-marketing.
The next part of the study will focus on the conclusions and recommendations for
the study.
Chapter Six
Conclusions and
Recommendations
This chapter describes the obtained results through the survey in
addition to the recommendation.
Conclusions
The research was done to understand how the
e-marketing technology affected Saudi Arabia British bank. It was done to see
how e-marketing affect the bank’s delivery of service and the future of such
technology in the banking industry. Primary research was used in the study.
Based from the study the research has found out that SABB is using e-marketing
as a selling tool. It has made e-marketing part of its selling strategy. SABB
has the capability and the capacity to make use and maintain a SABB strategy.
Based on the research regarding SABB, the company has the capability to make use
of internet marketing strategies given its current standing in its industry. The
company has the resources to make sure that SABB will work. Based on the
analysis of the results of the data gathering procedure, the researchers found
out that SABB bank is using e-marketing in selling its banking service through
various steps such as the bank has its own web site, the bank provides its
clients with an access to make applications for core banking services, the
bank provides its client with new service free of charge, Furthermore SABB
uses its web site for various tasks such as promoting its services, shopping
centre for its various financial products, publicity, delivery channel, to
reduce banking services costs, to build good relation with clients, to develop
new services, to meet clients needs, to increase marketing share and to fulfil
bank's obligation toward the environment. The result the study on how SABB Bank
uses the internet and related technologies is connected to the literature review
on how businesses use the internet and e-marketing technologies. The literature
of Siegel concentrated on discussing how the internet and e-marketing was used
by business. Such literature gave a categorized description of how e-commerce
was used on different instances and how such instances gave benefits to the
business using it. The literature gave examples of how the internet technology
proved helpful to most businesses.
One aspect of the survey shows that the
internet helped in speeding up transaction. It can be attributed to the
literature review and the benefits of the internet. In the literature review
from works of some discussions were made towards the internet and how it
affects businesses. The result of the study and the literature affirmed that
the internet provided a faster transaction. Other parts of the literature review
gave descriptions of how the internet and e-commerce technologies would benefit
business. Works of all contributed to the description of how the internet
provided benefits to businesses through speeding up transaction. Their ideas on
how the internet changed business processes paved the way for a clearer
description of how the internet illustrated the different technologies that man
has dreamed of. It was the answer to man’s desire of using technologies that
will reduce their physical work and increase the intellectual activities.
Although it is believed that internet is being used by individuals to gain power
and prestige, it cannot be ignored that the internet made sure that services can
be done on a faster time. The process in transaction is lessened thus the
company can go to other clients while one transaction process with another
client is nearing its end. With this process more clients gets to be satisfied
by the company. Based from the study and from the data acquired SABB is facing
some challenges when they use the e-marketing technology. Notwithstanding of
the use of e-marketing by SABB in selling its banking activities, SABB face many
challenges or restrictions in implementing such new technology such as: Security
concerns, high prices of new technology, existing more of services, lack of
access to internet, lack of clients awareness of internet services, governmental
regulations, lack of technology know how, the need for different skill of staff,
lack of privacy, lack of top management support, language restriction and
required infrastructure.
Among the abovementioned challenges security was
the issue most chosen because it is the one that can create catastrophic effect
over the relationship of a company with its clients. Security is an important
concern not only by banking institutions but clients as well. The literature
review had a discussion about the challenges to the internet pertaining to
security. The literature review on what Blythe thinks as what can be the
barriers of using the internet technology reaffirmed that the internet is not a
perfect technology. Blythe’s literature is connected to the result of the study
particularly on the problems of the internet and why it has difficulty in
maintaining security. One part of the literature clearly showed that internet’s
disadvantage included security. As stated in that part consumers worry about
their credit card numbers, while companies worry that others will invade their
computer systems for espionage or sabotage purposes. The concern of clients and
businesses gave a better understanding of how dangerous it is to deliver
unprotected information from the internet thus security is and should be a
concern for SABB when they use the internet and related technologies. The result
reaffirmed the literature and it showed that one of the concerns for using the
internet, e-commerce and e-banking is the security of files and the prevention
of files being lost. Once files are lost clients lose their trust towards the
company. The internet can be a dangerous place for files to be transmitted or
kept. It can be easily corrupted by different people but certain files can be
used to counter such threats.
Based from the study the various restrictions
from the government of Saudi Arabia are considered a part of the barriers
towards the use of e-marketing. The restrictions can cause some technologies to
be improved further. Based from the study E-banking has a bright future not only
in Saudi Arabia but on SABB as well. The e-banking technology can still be
improved and will still give more benefits in the future. This kind of
technology will reach other sectors in Saudi Arabia and it will develop into
something much better. This kind of technology can still be modified to meet the
changing needs of Saudi Banks and SABB. Based from the test results from both
hypotheses, it can be concluded that SABB is indeed using E-marketing as a
selling tool. SABB has found the technology they need in E-marketing. It could
also be concluded that SABB may face restrictions while they are using
E-marketing, this restrictions affect the way service is given to the clients.
Recommendations
Based on the above conclusion the study recommends
that SABB has to expand its use of e-marketing in order to satisfy the bank
clients need and to enhance its competition positions. In addition train all of
its employees how to use e-marketing technology in selling bank service to
various segments. SABB is recommended to enhance security issue by looking for
the latest technology in this respect. Furthermore SABB is requested to hold
some meeting with existing clients and potential one to make them aware of this
new technology and to encourage them to use in their daily needs, by assuring
them of its safety and privacy. Future research should be done on other systems
that can be useful to SABB; these systems should create drastic changes to the
operations of the bank. It should meet the financial capabilities of SABB.
Future research should also be done to strategies that are used to counter the
negative effects of using internet technology.
Limitations and further research
A
number of limitations should be acknowledged here to form future research.
-
The generalization of the findings of
this study will be limited due to
inability to ask a sample that represents the population during conducting
the study.
-
Furthermore the researcher faced some
problems during the distribution of the questionnaire due to time limit.
-
Moreover the researcher faces some
problems regarding the resources of e-marketing in English language.
Dear,
My name is I am
a part time student at , Great Britain. I am preparing my dissertation on
e-marketing in Saudi Arabia (Saudi British Bank) as the final stage to complete
the Master degree.
You are kindly
requested to answer the questionnaire which will take around 15 minutes. Your
cooperation is very important to finalise the topic. The collected information
will be kept confidentially, and only used for research purposes.
Thanks for your kind
cooperation
E- Marketing
Survey
Part 1:
Demographic Data
Please choose one
most appropriate answer.
1. Gender:
?
Male ?
Female
2. Age:
?
25 years or less
?
26-35 years ?
26-35 years
?36-45
years
? 46 years or more
3. Educational
level: ?Under
graduate ?Graduate
?
Post Graduate
4. Years of
experience with SABB Bank:
?1
year or less
?
2-5 years
?
6-8 years
?9
years or more
Part 2: E-
Marketing
The following
statements are related to the use of e-marketing in selling bank services,
please indicate the appropriate answer from the following options 5=Strongly
agree, 4= Agree, 3= Neutral, 2=Disagree, 1= Strongly disagree.
|
No. |
Item |
Strongly Agree |
Agree |
Neutral |
Disagree |
Strongly Disagree |
|
1. |
The bank has its own web site |
|
|
|
|
|
|
2. |
The banks consumer has the facility to communicate with
the bank via the Internet |
|
|
|
|
|
|
3. |
The bank provides the consumer with the possibility to
make applications for core banking services |
|
|
|
|
|
|
4. |
All bank's new services are shown on the site |
|
|
|
|
|
|
5. |
The bank encourages its consumers to use its web site |
|
|
|
|
|
|
6. |
The bank web site is used as a facilitator for payment
purposes |
|
|
|
|
|
|
7. |
SABB provides its new services free of charge |
|
|
|
|
|
|
8. |
SABB uses its web site to promote its services |
|
|
|
|
|
|
9. |
The Bank uses the Internet for its permanent
advertisement |
|
|
|
|
|
|
10. |
Bank's web site is used to strengthen its brand name |
|
|
|
|
|
|
11. |
Bank's web site is used as a shopping centre for its
various financial products |
|
|
|
|
|
|
12. |
SABB uses its web site for publicising its services |
|
|
|
|
|
|
13. |
Bank's web site is used fro the purpose of enhancing
bank's competition |
|
|
|
|
|
|
14. |
Bank' web site is used as banking services delivery
channel |
|
|
|
|
|
|
15. |
The bank is using the web site to cop with fluctuations
in services demand |
|
|
|
|
|
|
16. |
Bank's web site is used to face competition pressures |
|
|
|
|
|
|
17. |
The bank use its web site to achieve cost and
efficiency gains |
|
|
|
|
|
|
18. |
The banks is using its web site to build good
relation with its consumers |
|
|
|
|
|
|
19. |
The bank provides a large number of services through
the web site. |
|
|
|
|
|
|
20. |
Web site is used to develop new services. |
|
|
|
|
|
|
21. |
The web site is used to meet consumers needs |
|
|
|
|
|
|
22. |
Bank's services are performed quickly through h the web
site |
|
|
|
|
|
|
23. |
SABB use e-marketing as a tool or increasing its
market share |
|
|
|
|
|
|
24. |
E-marketing is used to provide targeted market needs
|
|
|
|
|
|
|
25. |
E-marketing is used by the bank to fulfil its
obligations towards its environment |
|
|
|
|
|
Part 3:
Restriction of using E-Marketing
The following
statements are related to restriction of using e-marketing in selling bank
services, please indicate the appropriate answer from the following options
5=Strongly agree, 4= Agree, 3= Neutral, 2=Disagree, 1= Strongly disagree.
|
No. |
Item |
Strongly Agree |
Agree |
Neutral |
Disagree |
Strongly Disagree |
|
1. |
Security concerns |
|
|
|
|
|
|
2. |
Prices of New technologies |
|
|
|
|
|
|
3. |
Existing mode of services |
|
|
|
|
|
|
4. |
Lack of access to internet |
|
|
|
|
|
|
5. |
Lack of awareness of internet service and its benefits |
|
|
|
|
|
|
6. |
Governmental regulation |
|
|
|
|
|
|
7. |
Lack of technology know how |
|
|
|
|
|
|
8. |
Bank's internal regulations |
|
|
|
|
|
|
9. |
The need for different skill of staff |
|
|
|
|
|
|
10. |
Vast cost and effort to develop network |
|
|
|
|
|
|
11. |
Lack of privacy |
|
|
|
|
|
|
12. |
Fear of distraction and possible mistakes in transactions |
|
|
|
|
|
|
13. |
Consumer's preference to associate a bank transaction
with human interaction |
|
|
|
|
|
|
14. |
Reading difficulties of Internet bank site by consumers |
|
|
|
|
|
|
15. |
The continuous need for invention of new services |
|
|
|
|
|
|
16. |
Lack of top management support |
|
|
|
|
|
|
17. |
Consumers' computer literacy |
|
|
|
|
|
|
18. |
Lack of Internet service providers |
|
|
|
|
|
|
19. |
Having an International brand name |
|
|
|
|
|
|
20. |
Lack of having effective information system |
|
|
|
|
|
|
21. |
Language restriction |
|
|
|
|
|
|
22. |
Lack of required infrastructure |
|
|
|
|
|
