THE EFFECT OF PROMOTION STRATEGIES ON DEPOSIT MOBILIZATION: THE CASE STUDY ON COMMERCIAL BANK OF ETHIOPIA

Abstract

The study evaluates the effect of promotion mix elements .i.e. Advertising, Personal Selling, Sales Promotion, Public Relations and Publicity and Direct Marketing on deposit mobilization of Commercial Bank of Ethiopia. The target population was the employees and account holders of CBE in Addis Ababa. A qualitative and quantitative research approach was applied. A standard 5-point Likert scale questionnaires were distributed to a total of 786 sample members of which 386 were employees and 400 were account holders of CBE in Addis Ababa. A systematic simple random sampling technique was used to determine the sample members for CBE employees and a non-random sampling /Convenience sampling/ was used to determine the sample members for the customers. Ten years total deposit mobilized and promotion expense data were obtained to show the trend. The questionnaires were analyzed by using SPSS version 20 statistical software program and consequently Pearson Correlation and Multiple Regression analysis were carried out to test the relationship between the promotion mix elements and deposit mobilization. The study determined that the promotion mix elements have an effect on deposit mobilization and the level of their correlation and appropriateness was confirmed though their intensity varied. The effect of Direct Marketing on deposit mobilization was identified to be as the least. The hypothesis result also confirmed the same in the research model. Thus, the Management of CBE in collaboration with the Business Development Sub-Process and involving the concerned government body when the need arises have to work by giving critical attention in order to exploit the best out of each cent spent on promotion.