The banking industry is highly competitive, with banks not only competing among each other: BUSINESS IMPROVEMENT (MARKETING & SALES / OPERATION / PRODUCT) Assignment, WOU, Malaysia

Introduction
The banking industry is highly competitive, with banks not only competing among each other; but also with non-banks and other financial institutions (Kaynak and Kucukemiroglu, 1992; Hull, 2002). Most bank product developments are easy to duplicate and when banks provide nearly identical services, they can only distinguish themselves on the basis of price and quality. Therefore, customer retention is potentially an effective tool that banks can use to gain a strategic advantage and survive in today’s ever-increasing banking competitive environment.

1.2 Problem Statement
The majority of New Zealand’s banks have non-domestic owners and are not very diversified in terms of the products and services they offer (Hull, 2002). This suggests that the New Zealand banking industry has reached the maturity phase of the product lifecycle and has become commoditized, since banks offer nearly identical products. This carries the danger of creating a downward spiral of perpetual price discounting — fighting for customer share (Mendzela, 1999).

Answer

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