CBA research

July 6, 2017 | Autor: Julius B. Kandege | Categoria: Business Administration, Services Marketing and Management, Marketing Research
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TABLE OF CONTENTS


TABLE OF CONTENTS i


DECLARATION iii


DEDICATION iv


COPYRIGHT v


ACRONYMS vi


LIST OF TABLES AND CHARTS vii


ACKNOWLEDGEMENT viii


LIST OF APENDICES ix


ABSTRACT x


CHAPTER ONE

1.0 DEVELOPMENT OF BANKING INDUSTRY 1
1.1 BACKGROUND / BRIEF HISTORY OF CBA 3
1.2 BACK GROUND TO THE PROBLEM 8
1.3 STATEMENT TO THE PROBLEM 9
1.4 RESEARCH OBJECTIVES 9
1.4.1 General Objective 9
1.4.2 Specific Objectives 9
1.5 RESEARCH QUESTIONS 10
1.6 SIGNIFICANCE OF THE STUDY 10
1.7 LIMITATION OF THE STUDY 11
1.8 DELIMITATION OF THE STUDY 11

CHAPTER TWO

2.0 LITERATURE REVIEW 12
2.1 THEORETICAL REVIEW 12
2.1.1 PRODUCT 12
2.1.2 PRODUCT DEVELOPMENT 13
2.1.3 CLASSIFICATON /CATEGORIES OF NEW PRODUCTS 13
2.1.4 PRODUCT DEVELOPMENT PROCESS 15
2.1.5 A BUDGET FOR NEW PRODUCT DEVELOPMENT 23
2.1.6 PROTECTING NEW PRODUCTS 23
2.2 EMPERICAL REVIEW 24







CHAPTER THREE

3.0 RESEARCH METHODOLOGY 26
3.1 RESEARCH DESIGN 26
3.2 UNIT OF INQUIRY 26
3.3 SAMPLING TECHNIQUES 26
3.4 DATA COLLECTION METHODS 27
3.4.1 Primary Data 27
3.4.2 Secondary Data 27
3.5 DATA ANALYSIS 27




CHAPTER FOUR

4.0 RESEARCH FINDINGS 28
4.1 INTRODUCTION 28
4.2 FINDINGS, ANALYSIS AND INTERPRETATION 29
4.3 CBA'S PRODUCTS WITH OTHER BANKS 36
4.4 THE PRODUCTS DEVELOPED BY OTHER BANKS WITHIN FOUR MONTHS 38
4.5 SAiOT ANALYSIS FOR CBA 40




CHAPTER FIVE

5.0 CONCLUSION AND RECOMMENDATIONS 45
5.1 CONCLUSION 45
5.2 RECOMMENDATIONS 46

BIBLIOGRAPHY 49


APPENDICES 51










DECLARATION

I, Jerome Msigwa declare that this research report is a result of my
personal findings and efforts. Something to note is, though I got enough
assistance from other people in my community, any mistake or misleading
information isn't the cause of their participation. To the best of my
knowledge it hasn't been submitted for any award at any High Learning
Institution or University.


Candidate (Researcher):

Signature .……………………………..
Full Name …………………………….
Date ……………………………


Supervisor:

Signature ……………………………
Full Name ……………………………
Date …………………………..




Internal Examiner:

Signature ……………………………..
Full Name ...………………………………
Date ...……………………………



DEDICATION


I the author of this report work; I heartily dedicate it to my lovely
father Mr. Michael Sezero, my beloved mother Mrs. Sauda Mwanga, my guardian
mother Mrs. Victoria Sezero, my young brothers Rogers Sezero, Gilbert
Sezero and Moris Sezero. This dedication won't end up here till it drops
to my young sisters Happiphania Sezero, Anipha Shabani Manjereza and Aneth
Sezero may God bless this family so as it stands on prayers and flourish in
success always.























COPYRIGHT


© 2008 by Msigwa Jerome

ALL RIGHTS RESERVED
No part of this research report may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, may it be
electronically or mechanically, or by photocopying, recording or otherwise
without a prior written permission of the researcher and/or Faculty of
Commerce at Mzumbe University (MU) on behalf.
























ACRONYMS

A/C Account
ATM Automated Teller Machine
BBA Bachelor of Business Administration
BoT Bank of Tanzania
CBA Commercial Bank of Africa
CRDB Corporate Rural Development Bank
Dept Department
DSE Dar es salaam Stock Exchange
FABK First American Bank of Kenya
GoT Government of Tanzania
HESLB High Education Student Loan Board
HR Human Resource
MD Managing Director
MKUKUTA Mkakati wa Kupunguza na Kutokomeza Umasikini Tanzania
MU Mzumbe University
NBC National Bank of Commerce
NMB National Microfinance Bank
NICO National Investment Company
PR Public Relation
PPF Pension Parasitical Fund
SAiOT Strength, Areas of Improvements, Opportunity and Threats
SACCOSS Saving and Credit Corporative Societies
SCB Standard Chartered Bank
SMEs Small and Medium Enterprises
UBA United Bank of Africa





LIST OF TABLES AND CHARTS


1. CHARTS 2.1 ILLUSTRATING THE UTILITY FUNCTIONS BASED ON
CONJOINT ANALYSIS

2. CHART 2.2 ILLUSTRATIONS FOR PRODUCT
DEVELOPMENT PROCESS

3. TABLE 2.3 AN EXAMPLE OF HOW A COMPANY
CAN CALCULATE COSTS
OF NEW PRODUCTS TO BE DEVELOPED

4. TABLE 4.1 HOW CBA GENERATES PRODUCT
DEVELOPMENT IDEAS

5. TABLE 4.2 TYPE OF PRODUCTS DOES CBA DEVELEP

6. TABLE 4.3 HOW CUSTOMERS GET INFORMATION OF THE
NEW DEVELOPED PRODUCTS

7. TABLE 4.4 COMPARISON OF CBA'S PRODUCTS WITH
OTHER BANKS

8. TABLE 4.5 BRANCH NETWORKS OF THER BANK






ACKNOWLEDGEMENT

I kindly give my sincere thanks to our Almighty God for granting me great
love and care I didn't deserve. I will always glorify His name. I once
again thank my parents for their prayers and financial support throughout
my field work. My guardians Mr. and Mrs. Elson Ngemera Lubinga for their
full support in accommodating me during my study, I real appreciate their
love, care and concern to me. I owe this family so much. I can't deny the
financial support I got from the GoT via HESLB which made my study
successful.
Moreover I convey my sincere appreciation to the MD of CBA (Stress Free
Banking) Mr. Nehemiah Mchechu and the whole management team. The team made
my field attachment possible by allowing me to undertake this work in the
firm and offered me with a friendly support in accomplishing this work.
Special thanks are to be granted to HR Manager Mr. David Rwiza, Head of
Operation and service delivery Mr. Ronald Manongi and his team, Mr. Savio
Fernandez and Mrs. Pudensiana Ndaro inclusively. Mr. Christian Mpalanzi and
the Head of retail Banking Mr. David Shambwe are to receive heartily
appreciation for their kindness in advising me.

Mr. Abdullah Singano the Head of Marketing and Product Development was my
organization host supervisor. I don't have exact words of expressing my
gratitude to him. He had been very kind and helpful at any moment I asked
for his help though a tight schedule he always had. I have learned a lot
in marketing activities via him. May Almighty God be with him in his
activities and achieve success always.
Mr. Omary Swalehe my university supervisor had been part of success in my
study. I appreciate his assistance, guidance, advice, comments and his
visits to my field work site. God may grant him the same soul in helping
other students.

I recognize the friendly support and encouragement I got from the following
people during my study. Mr. Masoud Selemani Kova, Miss. Hidaya Ally, Miss.
Upendo Jaka, Miss. Grace Richard, Mr. Tumaini Joseph, Mr. Oddo Limuna,
Miss/ Helena Kalolo Kimpa, Mr. Nurdin Masoud, Miss. Aneth Tarimo, Miss.
Mwanakombo Hassan and Mr. Japheth Mukala of Institute of Finance
Management. I understand their social, academic and financial support they
always gave me. God bless them.

LIST OF APPENDICES


APENDIX


A-QUESTIONAIRE FOR CBA STAFF

B-QUESTIONAIRE FOR CUSTOMERS

C-QUESTIONAIRE FOR THE ADVERTISING AGENT

D-ORGANISATION STRUCTURE





















ABSTRACT

A financial sector grows fast in Tanzanian market. There are almost 32
Commercial banks and other financial Institutions like SACCOS, B Blue,
Bayport Financial Services, and POVERTY AFRICA to mention a few. All target
the customers who seek for financial services therefore increase
competition in this sector. Banks put efforts to develop new products with
accordance to the needs of their targeted customers.
The aim is to attract new customers, retain old ones, positioning the firm
to the minds of customers, creation of competitive advantage to the market,
improvement of sales, profits and the possibility if developing new
markets.
The researcher went for field to assess the effectiveness of product
development done in banking industry the case study being CBA.
The study had different aims including.
Determining the effective ways CBA uses in generating Product Development
Ideas, identifying types of products developed by CBA, recognizing the
steps used by CBA in developing new products. To find out the tactics used
by CBA in testing the market of the new developed products, and learning
the process used by CBA in launching new developed products to mention a
few.
The Literature review shows how other researchers say about new product
development.
Different methods of data collection were employed. Generally both Primary
and Secondary data collection methods were involved.
The researcher found that, CBA is effective in developing new products
according to the needs of customers, requirements of the bank and to
overcome competition. The aim is to meet the customer needs, increase
market share in Tanzanian market and branding CBA Tanzania with products
that CBA Kenya offers and perform well in its market.
The researcher recommended that, staff members are to be involved in early
stages of idea generation to increase effectiveness in product development
process. This will give a wider chance of knowing customer needs,
competitor's strategies and current firm's needs. The service delivery
dept. has to be given frequent trainings on the operation of new developed
products. Also customer service knowledge should be within their
fingerprints/actions. This will ensure that, the developed products reach
the targeted customers as per the expectations and exist till maturity.
CHAPTER ONE



1.0 DEVELOPMENT OF BANKING INDUSTRY

The banking system of Tanzania is a result of the first major government
decision in economic rehabilitation after independence. The first, revealed
in parliament in June 1965 was the decision to introduce a separate
currency for Tanzania and to establish a Central Bank to replace the East
African Currency Board.

The Central Bank (BoT)
BoT, the Central Bank, was established by Act of Parliament in January 1966
and commenced its operations in June 1966; just one year after the decision
was announced. The bank has broad powers to fulfill its functions as
regulator of banking and credit in the economy and to manage the country
foreign exchange reserve. It is empowered to conduct open- market
operations, to rediscount and grant loans and advances against certain
credit instruments at published rates of interest, to require banks to
maintain minimum reserves, to prescribe the minimum rate of interest that
financial institutions may pay on deposits, and to issue orders to control
the volume, terms and conditions of credit, including installments credit
extended by banks and financial institutions. It also promotes DSE.
(Source:http://www.tanemb.se/combanks.htm)

How Fair Is The Financial Sector?
Until 1991 there were only two commercial banks in Tanzania, and both of
them were state owned. They were the National Bank of Commerce and the
Cooperative and Rural Development Bank. These banks gave politically
directed loans to cooperatives, Ujamaa villages and parasitical
organizations. These enterprises were not managed profitably, and as a
result, the two banks found themselves with Tshs. 500 billion in non-
current assets in 1994. These assets were transferred to the loans and
Advances Realization Trust for recovery. The state – owned banks have now
been privatized and there is a profitable NBC Ltd and the CRDB Bank. The
banks have made a turnaround in their operations, and there are profitable
ventures with improved and diversified finance products. The banking and
financial institutions Act of 1991 provided for licensing of private local
and foreign banks. To date there are more than 32 commercial banks and
financial institutions which the BoT has licensed. The beginning of private
sector was shaky as the Meridian Biao bank collapsed in 1994, and had to be
bailed out by Treasury which issued special bonds amounting to $ 36
million.
It was at this juncture that STANBIC of South Africa acquired the
operations of Meridian Biao which had failed due to big foreign exposure as
it invested unprofitably outside the country funds that could not be
recovered. There have been a number of bank failures and crises that led to
closure of the banks or putting them under the BoT administration in bid to
restructure and recapitalize them.

Some of the banks which experienced crises are; Trust Bank (now Federal
Middle East Bank) and First Adili Bancorp (now Azania Greenland Bank whose
headquarters were in Uganda and had to be closed). The BoT has taken
measures to ensure that bank crises do not occur at this stage where there
is a nascent ban needs to be nurtured.

The capital requirement to start a new bank has been increased from Tshs 1
billion to Tshs. 5 billion and that of financial institution been increased
too. SACCOS now operate under BoT as quasi- financial institution that are
engaged in micro – finance as agents of commercial banks. The BoT
supervision department has increased its capacity to monitor the banks and
conduct oversights to ensure adhere to Prudential Regulations and Basle
International Standards of Bankers.

There have been suggestions that a Financial Services Regulation Authority
has to be formed to regulate banks and financial institution. BoT will
regulate money markets, formulation of monetary policy, and administration
of external debt as well as interest rates and international reserves. The
Financial Services Regulation Authority would deal solely with the
monitoring of banks and the insurance industry. It would ensure that banks
are managed by professional bankers and regulated foreign exchange
exposure. Adherence to prudential regulations will avert possible bank
crises and help banks contribute to development in the various sectors of
economy. There is a bit of improvement as banks have heeded to moral
suasion to lower lending rates and the cost of capital. Some banks have
established micro financing departments to finance SMEs. The banks were
risk averse as there was no culture of bank loans repayment and the legal
framework protected borrowers at banks and hence the law has been amended
to make it easy for banks to collect collateral pledged for bank loans and
dispose recovery.( Source: http://www.skyfm.co.tz/ipp/financial )


1.1 BACKGROUND / BRIEF HISTORY OF CBA

CBA Ltd was found in 1962 in Dar es salaam, Tanzania and quickly
established branches in Kenya and Uganda. Rather than having the head
office in Nairobi, it has 10 service delivery centers in the same city and
three in Mombasa.

The founding shareholders of the bank were Bank of America, Banque
Bruexelles Lambert Bank, Banque National de Paris and Commercial Bank
(later Dresdner Bank). CBA was re- incorporated in Kenya in 1967 after
operations were nationalized in Tanzania. In 1981, CBA became a wholly
owned subsidiary, of Bank of America when the latter acquired the
consortium partners' shares but retained minority local shareholding.
During the period of 1984 to 1991, Bank of America gradually sold its
majority shareholding to local Kenyan investors. CBA is now wholly locally
owned and managed, and with the acquisition of "FABK" will become the
largest privately owned local bank.

CBA is back in Tanzania after acquiring UBA Ltd. which commenced operations
as a fully fledged commercial bank in 2002. Since CBA took over the
majority shareholding of UBA, there has been tremendous positive
developments taking place within the bank in which the organization has
certainly prospered under its stewardship; the business is now profitable
from the loss making that was recorded since the establishment of the bank
in 2002. CBA acquired UBA in 2005 from FABK Ltd whose operations in Kenya
it had also acquired.

CBA is currently amongst the ten best largest financial services players
out of more than 100 which operate in the East African region with assets
that exceed US$ 575 Million. By following a conservative approach in all
its activities and placing emphasis on service quality and operating
efficiency, the success of this strategy is reflected in pre- tax profits
rising from Kshs. 70 million in 1991 to Kshs. 437 in 2004 whilst, over the
same period, total assets have increased from Kshs 2.2 billion to Kshs.
20.2 billion. And shareholders funds increased from Kshs. 240 million to
Kshs. 2.0 billion.

CBA has been recognized by different institutions as the successful bank
and won the following awards.
Euro money – Best Bank in Kenya 1994, 1995, 1999 and 2000.
The Bankers Magazine – Bank of the year 2000 award.
Emerging markets investor magazine – best bank in Kenya 2000.

CBA Tanzania Ltd is the only first foreign bank to be 100% managed by
locals from top to low level of management. Also is the first and only bank
in Tanzania that is offering long – term Mortgage financing of up to
fifteen years. Nevertheless, it's the first indigenously owned financial
services institution to receive an international rating through Fitch
Ratings (Previously Thomson Financial Bank watch).

VISION
CBA is acclaimed for the "Stress – Free Banking" experience all its
customer enjoy.

MISSION STATEMENT
"CBA's mission is to be the leading provider of financial services in its
chosen markets."

CORE VALUES

CBA Employees
These exhibit the highest levels of integrity and professionalism. In
meeting the service needs of the customers, the employees aim to "get it
right the first time, every time"
Customer Focus
The bank is customer driven organization that views every customer contact
as an opportunity to add value and enhance the relationship. It listens to
customers, learn and understand their needs thereby enabling it to
anticipate and pro- actively offer attractive solutions. It continuously
strives to offer the best products and services for the customers at a
price that deliver value to them and to CBA.

Performance
CBA aims for optimum and sustainable profitability based on competitively
priced products. The bank offers products and services that deliver good
value to the customers. It understands and respects the risk involved in
the business and continuously seeks ways of minimizing it without
compromising profitable growth.
It cultivates a performance driven culture that rewards achievement,
enthusiasm and team spirit of its employees.

Communication
If offers open, honest and constrictive communication throughout the
organization by supporting healthy debate and personal participation on
issues affecting the business. Communication with customers is in a fresh
and informative way.

Service
It optimizes the use of relevant technology to deliver attractive customer
solutions, increases efficiency and minimizes cost base. The bank
constantly seeks ways to improve the delivery of service to its customers.

CUSTOMERS
CBA Tanzania Ltd has main client base which includes multinational and
medium- to – large corporate, diplomatic missions and related development
organizations, international organizations and agencies, non – governmental
organizations (NGOs), medium – to – high net worth personal customers and
employees of the above organizations. SMEs and personal banking services
inclusively.
PRODUCTS AND SERVICES
CBA Tanzania Ltd has been able to bring in, new products and services as
part of its innovations to creatively serve the Tanzanian market. Currently
the bank offers the following products and services. Current a/c and saving
a/c .Other products in saving plan: Pro – saver a/c, Young champion's a/c
(Junior Savings) and Optimum a/c. A notice a/c is a fixed deposit a/c,
there is also CBA Premium Finance, CBA Home Finance (Asset Financing
Facilities) and CBA Car Finance which is a financing plan/ scheme that can
finance 70% of he value of the car one intends to buy. It's the other type
of asset financing.
Other Products that CBA offers are: Overdraft services, Trade Finance
Products, Fund transfers, Guarantees, Invoice discounting, Short term loans
to finance business and Personal loans which have no restrictions on the
use of the borrowed funds.

ORGANIZATION STRUCTURE
CBA Tanzania Ltd is the only bank in Tanzania that is 100% managed by
Tanzanians. The management team comprises of the following structure.
The MD as a person in top management level reports to the board of
directors. MD has his personal assistant in the office.
The middle level of management comprises of nine (9) departments each with
one head of dept. HR dept whose work is to recruit, motivate and develop
personnel, Corporate banking dept, Treasury and Institution dept which
deals with treasury management, Correspondent banking, Partial responsible
for corporate finance. Retail banking dept. deals with corporate liability
management, fund management, cash management, Retail liability and assets
growth. Operations, Service Delivery and Administration dept,
Credit Risk Management dept., which is responsible for credit
administration. Marketing and Product Development dept. deals with product
development, marketing and market research and corporate affairs (Public
and Community affairs).Lastly is the Finance dept. which is responsible for
business planning and monitoring. The heads of these departments report
their activities to MD.


The low level of management consists of the following: _
Relationship manager who reports to the head of corporate banking, Treasury
managers who reports to the head of Treasury and Institutional banking,
Institutional Relationship manager who reports to the head of Retail
banking, the head of Service Delivery whose work is to manage all channels
of service delivery to customers, card operations and general
administration, reports to the head of Operations, Service Delivery and
Administration. Credit Analysts report to the Head of Credit Risk
Management. Their work is credit administration. The Finance manager whose
work is financial management, reporting reconciliations and asset
management, reports to the Head of Finance.

CBA'S BUSINESS SUPORTERS
CBA has been supported by different organizations through achieving its
objectives. These include ZK- Advertising agents, Jamana Printers, Sign
Industries Ltd, Kabula Media group Ltd as the PR agent to mention a few.
All these operate in Tanzania.

BRANCH NETWORK
After its establishment in Kenya and Uganda where the bank has more than
fourteen branches, CBA Tanzania Ltd has its head office in J- MAL house and
one branch in PPF House both at Samora Avenue. According to its expansion
policy the bank expects to reach all major regions in Tanzania mainland
within 5 years. After acquiring UBA which existed from 2002, CBA has three
years in Tanzanian market.














1.2 BACK GROUND TO THE PROBLEM

In dealing with product, one should consider; product management, branding
and product development. The later is the source of new customers, retains
the old ones and creates new position of the firm to the minds of
customers.
Many executives in business firms tend to concentrate on pricing,
promotion, placement and service delivery, when products are in the market.
They believe these are tactics that can pull and hold them to success. They
overlook effective product development and innovations. (Source: Global
Benchmark Study (2004) Mastering Innovation)

In analyzing customer behavior, it's found that, customers are very
flexible in shifting to new products/services. They are highly affected
with competition and technology also economic, social, cultural, personal
and psychological factors in their purchasing decision.
Sometimes customers become idle in the market. They do wait for new
products and services that satisfy their needs and wants. Businesses
should be pro-active to changes by identifying opportunities and threats
before any product decision. If business firms are not innovative in
introducing new products in the market, they will loose customers and
getting new ones will be very difficulty. (Source: Wilson and Fook
(1987:199))

Even if new products are developed, in order to last longer in the product
life cycle which is currently short for many products, they have to be
effectively developed and introduced in the market. Therefore existing
products are to be improved, old ones to be eliminated from the market and
new ones to be generated. Effective product development gives support and
improves competitive position in the market, increase possibilities to make
markets and satisfy customer needs, assures better sales, turnover, profit
and a considerable market share.
Free entry and exit in banking industry create great competitive
environment. To overcome this and position itself in the market which
includes many banks, CBA has to effectively develop new products and make
sure that they do not die in early stages but reach maturity. (Source:
Researcher's view}


1.3 STATEMENT TO THE PROBLEM

As many banks struggle enough to capture idle/new customers in the market,
maintaining the old ones and attracting the ones of the competitors which
depends on how one is innovative to the products/services offered, the
researcher went for field to assess the effectiveness of product
development in banking Industry which has stiff competition, rapid
technological changes and volatile/dynamic customer behavior.




1.4 RESEARCH OBJECTIVES


1.4.1 General Objective

The main objective of the study was to investigate and assess the
effectiveness of product development as a strategy in product within the
banking industry CBA being a case study.

1.4.2 Specific Objectives

i) Determining effective ways used by CBA in generating product
development ideas.
ii) Identifying what types of products CBA develops.
iii) Determining what criteria are used to choose the type of
products developed.
iv) Recognizing the steps followed by CBA in developing new
products.
v) Finding out the tactics used by CBA in testing the market for
new products developed.
vi) Learning the process used by CBA in launching new products.
vii) Getting the techniques used by CBA in sending information to the
customers concerning the new products developed.
viii) Determining the defensive approaches used by CBA to protect its
products against the competitors.













1.5 RESEARCH QUESTIONS

i) What ways are used by CBA in generating product development ideas?
ii) What type of products CBA develops?
iii) What criteria are used to choose the type of products offered by
CBA?
iv) Which steps are followed by CBA in developing new products?
v) Which tactics are used by CBA in testing the market for new
products developed?
vi) How does CBA launch its new products?
vii) How do the customers get information of new developed products by
CBA?
viii) How does CBA protect its developed product against the competitors?




1.6 SIGNIFICANCE OF THE STUDY

The study had to play the following significant roles.
i) To give the organization clear picture on the effectiveness of
product development and suggestions on how to improve product
development process.


ii) Helped to integrate theoretical trainings obtained from classrooms
with the practical reality in the field. Also widening the
knowledge of the researcher in marketing activities.


iii) It was used as part of researcher's academic requirements at Mzumbe
University for the award of Bachelor of Business Administration in
Marketing Management.
iv) It could be used as a reference to other studies of the
same nature.



















1.7 LIMITATION OF THE STUDY


Tight schedule of banking Industry.
As I was involved in day to day activities within Marketing and
Product development it made my schedule of collecting data from other
banks being very tight and unsuccessful sometimes.
Confidentiality of the data.
Getting information about the products in banks was a difficult task
as many data seemed to be confidential.
Poor responses from both customers and staff.
Not all people who were targeted for questionnaires and interviews
responded positively. That had been proved by non replied e-mails,
unreturned questionnaire and short answers of the few people
interviewed.
Financial Constraints.
The increase of the costs of living in big cities like Dar es Salaam
made the targets of the researcher especially in visiting many Banks
unmet.





1.8 DELIMITATION OF THE STUDY

The study specialized to the effectiveness of product development in
banking industry specifically at Commercial Bank of Africa (CBA) within
Marketing and Product Development Department. The firm is situated in Dar
es Salaam at the junction of Samora Avenue and Morogoro Road Street. It's
in the ground and 1st floor of PPF House. The study took four months
commencing Oct 2007 to Jan. 2008.







CHAPTER TWO


2.0 LITERATURE REVIEW

This part gives the theoretical and empirical review of the study. Under
literature review the researcher was concerned with the reading of books,
journals, articles, records and getting information from the internet. The
aim was to understand the topic better and realize some gaps and unsolved
problems.




2.1 THEORETICAL REVIEW


2.1.1 PRODUCT

Stanton, Etzel and Walker (2005:209) state a product as a set basic
attributes assembled in an identifiable form. Or a set of tangible and
intangible attribute which may include packaging, color, size, price,
quality and brand, plus the seller's services and reputation. It may be a
good, service, place, person or an idea. Customers do buy more than a set
of attributes. They buy want- satisfaction in the form of the benefit they
expect to receive from the product.

Kotler P. (1998:446) suggests that, three distinct elements need to be
considered in explaining a product. These are Product attributes which are
associated with the core product and include such elements as features,
styling, quality, brand name, packaging and size and color variants.
Product benefits these are the ones that consumers perceive as meeting
their needs. Also they are referred to as the bundle of "potential
satisfaction" which includes product performance and its image. The other
is Marketing support services which are additional elements that the
organization provides in addition to the core products.

Abbott L. (1955:9) emphasizes that "What people really desire are not the
products but satisfying experiences '' This view has in turn been expanded
upon by Leavitt (1976) who argues that products need to be seen in terms of
benefits they provide rather than the functions they perform.

2.1.2 PRODUCT DEVELOPMENT

Richard .M.S. Wilson and Gillian (2005:406) define product development as
the introduction of totally new products to the world, imported products,
modified product and new brands.

Wikipedia the free encyclopedia term product development as: the complete
process of bringing a new product or service to the market. It recognizes
two paths involved in the process. The 1st involves ideas generation,
product design and detail engineering while the 2nd involves market
research and marketing analysis.

Prof. Dr. Juergen Schwill of the University of Applied science in
Brandenburg term product development as Innovation. He further depicts that
product development is a qualitative new product or service process which
differs noticeable against the pre-existing. He adds that this novelty has
to be consciously perceived (e.g. by customers, users) and consists therein
that purposes and means are linked together in a so far not known form.

2.1.3 CLASSIFICATON /CATEGORIES OF NEW PRODUCTS

Philip Kotler (2006:634) categorizes new products in six groups. These are
-:
i. New to the world products. These create entirely new markets. Less
than 10% of all new products are truly innovative and new to the
world. These involve greatest cost and risk because are new to both
company and market place.
ii. New product lines. These are new products that allow a company to
enter an established market for the first time.
iii. Addition to existing product lines. These are new products that
supplement established product lines including package size,
flavors and so on.
iv. Improvements and revisions of existing products .These are new
products that provide improved performance or greater perceived
value and replace existing products.
v. Repositioned products. These are existing products targeted to new
markets or market segment.
vi. Cost reductions .These are new products that provide similar
performance at lower costs

Wikipedia, the free encyclopedia gives several categories of new products.
These include; (i) Completely new to the market e.g. DVD players into the
home movie market, (ii) New product lines. These are new to the company
e.g. Game consoles for Sony, (iii) Repositioning. These are completely
novel and create totally new markets e.g. the air line industry, (iv)Line
extensions .These are additional modifications to the products lines
existed before, (v)Core product revision and (vi)Changes to Arguments
product .Is the value addition to the existing products.

Booz, Allen and Hamilton (BAH) (1982) suggest two principal dimensions that
need to be considered. First is how the product is new to the company and
second to the market place .They propose six stage classifications. (i) New
to the world products that create as entire new market .E.g. the launch of
Sony Walkman (10%), (ii) New product lines that are designed to enable a
company to enter for the 1st time an existing product sector 20%, (iii)
Additions to existing product line 26%, (iv) Improvements and revisions to
existing products (26%), (v) Repositioning where existing products are
retargeted in order to appear to new market segments (7%), (vi) Cost
reduction where products are modified to provide similar performance but at
a lower cost (11%).
The percentages are according to BAH'S study in United State of America
1980.

Robertson (1967) in his journal of marketing has proposed three groups for
product development or innovations. Continuous Innovations which simply
involve the modification of existing products and lead to few (if any)
changes in consumer behavior, dynamically continuous innovations which is
more disruptive than the previous category and do not change customer
behavior patterns in any fundamental way and discontinuous innovations
which are dynamically new and which lead to significant changes in pattern
of behavior and usage. Included within this are the jet engines,
television, stainless, antibiotics etc.


2.1.4 PRODUCT DEVELOPMENT PROCESS

There are several stages in the new product development process depicted
out by different authors. These stages are not always followed in order
especially in financial institutions.

1. Idea Generation
Wikipedia the free encyclopedia identifies different sources of which new
product ideas can be obtained. These include customers, designers,
company's research and development department, competitors, focus groups,
employees, sales people and corporate dealers, trade shows or through a
policy of open innovation .Also formal idea generation techniques can be
used , such as attribute listing, forced relationships , brain storming ,
morphological and problem analysis.

Kolter P. (2006:640) emphasizes that, before any new product is developed
the marketers and other executives should search for ideas. He believes
that greatest opportunities and highest leverage with new products are
found by uncovering the possible set of unmet customer needs of
technological innovation. He suggests that customers, scientists,
competitors, employees, channel members and top management are good sources
of new product development ideas. He adds that customers' needs and wants
are the logical psychology to start with. It can be reached through one to
one interview and focus group discussions which can explore product needs
and reactions.

2. Idea Screening
The screeners must ask at least three questions
i) Will the customers in the market benefit form the product?
ii) Is it technically feasible to manufacture the product?
iii) Will the product be profitable when manufactured and delivered to the
customers at the targeted price? (Source: Wikipendia the free
encyclopedia)

Kotler P. (2006:243) illustrates that the company has to state the proposed
ideas into three groups. These are promising ideas, marginal ideas and
rejects. He adds that each promising idea is to be researched by a
committee member who reports back to the committee.
The author goes on and identifies two types of errors in idea screening.
a) Drop Error: It occurs when the company permits good ideas to be
dropped knowingly or unknowingly from development and commercialization.
b) A Go Error: It occurs when the company permits poor ideas to
move into development and commercialization
He gives the purpose of idea screening as to drop poor ideas as early as
possible to avoid rising costs during each successful development stage.

3. Concept Development And Testing
Wikipedia the free encyclopedia suggests the developing of marketing and
engineering details at this stage by getting the answers of the following
questions:
Who is the targeted market and who is the decision maker in the purchasing
process?, What product features must the product incorporate?, What
benefits will the product provide?, How will the consumers react to the
product?, How the product can be produced most cost effectively?, What will
it cost to produce it?, Test the concept by asking a sample of prospective
customers what they think of the idea and prove feasibility through virtual
computer aided rendering and rapid prototyping.

Kotler P. (2006:645) explains this stage with three sub-stages.
a) Concept development should answer the following questions according to
him. These are: Who will use the product? , What primary benefits should
this product provide? , When will the market consume the product? He adds
that consumers do buy concepts and not ideas.

b) Concept testing is the one of which Kotler advices the producers to test
and present the product concept to the targeted consumers and get their
reactions. It can be presented symbolically or physically. He adds that
the more the tested concept resembles the final product or experience,
the more dependable concept testing is.

c) Conjoint Analysis (P. 646) by using this analysis Kotler says that the
company will be able to measure consumer preferences for alterative product
concepts. He assures that utility values that consumers attach to varying
levels of product's attributes are determined. Through this, respondents
are shown different hypothetical offers formed by combining varying levels
of attributes, then asked to rank various offers. Management can identify
the most appealing offer, the estimated market share and profit
accordingly.

1. CHARTS ILLUSTRATING THE UTILITY FUNCTIONS BASED ON
CONJOINT ANALYSIS Kotler P. (2006:647)


4. Marketing Strategy
Richard et al (2005; 417) highlight the importance of drafting the
preliminary statement of marketing strategy after formalizing the product
concept and gaining an understanding of probable buyer reactions. This
strategy should cover 1st, the short and long term sales, profit and market
share objectives and 2nd the structure of the marketing mix.
Kotler P. (1991:325)7th Ed in his Marketing Management identifies three
parts in marketing strategy which are;
1st .The one that describes the size, structure and behavior of the target
market, the planned product positioning and the sales, market share and
profit goals sought in the 1st few years.
2nd .In page 329 he emphasizes the outlining the product's planned price,
distribution strategy and marketing budget for the 1st year.
3rd. The marketing managers are to describe long run sales, profit goals
and marketing mix strategy over time.


5. Business Analysis
Richard et at (2005:417) view business analysis stage into three
dimensions.
a) The level and speed of 1st time sales
b) The level of replacement sales
c) The likelihood and possible level of repeat sales.
Each level of dimension need has to be calculated. This is done for each
market segment in which the organization tends to operate. The results are
then combined.

Wikipedia the free encyclopedia in business analysis directs the product
developers to estimate likely selling price based upon competition and
customer feedback .Also shows the importance of estimating sales volume
based upon size of the market and estimation of profitability and break
even point.

Kotler P. (2006:649), advices to estimate sales, costs and profits. In
estimating sales he suggests to estimate 1st time sales of the new product
in each period, replacement sales and repeat sales .Also the management has
to research product's survival age distribution. That's the number of units
that fail in year one, two, three, and so on. A high rate of repeat
purchasing means that the customers are satisfied. Costs are estimated by
research and development, manufacturing, marketing and finance departments.


Kolter P .(1991:328) 7th ed of Marketing Management advices management to
prepare business proposal's attractiveness in business analysis .It
includes sales, cost and profit projections to determine whether they
satisfy the company's objectives. If they do, the product concept can move
to the product development stage.



6. Product Development
According to Kolter P. (2006: 651), the job of translating targeted
customer requirement into working prototype is helped by a set of methods
known as Quality Function Deployment (QFD). The methodology takes the list
of desired Customer Attributes (CAs) generated by market research and turns
then into a list of (easy) engineering attributes that the engineers can
use. Kolter explains two stages of product development.
1. Physical Prototypes.
The Research and Development department has to develop one or more physical
revision of the product concept. Its goal is to find prototypes that embody
the key attributes described in the product development concept statements
that perform safe, wider, normal use and conditions, and that can be
produced within the budgeted manufacturing costs.

2. Customer Tests.
Kotler in the same edition says that, when prototypes are ready, they must
be put through vigorous functional tests and customer tests .He adds that
alpha testing is the name given in testing the product within the firm to
see how it performs in different applications. After refining the
prototype, further the company moves to better testing within customers. It
enlists a set of customers to use the prototype and give feedback.


7. Market Testing
Richard et al (2005:419) suggest different alternatives due to the
difficulties and costs of test marketing .These include stores carry the
product which tests shelf location, facing, price level and point of sales
promotions .The other is stimulated store technique in which group of
customers are invited to view a number of television commercials both for
existing and new products including the one under test.


Kolter P (2006:653) depicts that after management is satisfied with
functional and psychological performance, the product is ready to be
dressed up with a brand name and packaging, and put into market testing
.The amount of market testing may be severally reduced if the company is
under great time pressure because the season is just starting or
competitors are about to launch their brands .The company may therefore
prefer the risk of a product failure to the risk of losing distribution or
market penetration on a highly successfully product.

Wikipedia the free encyclopedia explains beta and alpha market testing in
the sense of testing the product and its packaging in typical usages
situations .Also conducting focus group customer interview or introduce at
trade show .At the same time the encyclopedia advises to make adjustment
where necessary and produce an initial sample of the product and sell it in
a test market area to determine customer acceptance.

8. Commercialization
Wikipedia the free encyclopedia often considers commercialization as the
post –new product development. This involves the launching and promotions
.The encyclopedia also advises the firms to fill the distribution pipelines
with the product.

Richard et al (2005:420) explain this stage through passing the following
questions.
1. When should the product be launched? Is the company to be the first into
the market? Or wait until the competitors have spent money to establish
the market? This helps in learning competitor's experience.


2. Where should it be launched? Regional, national or international launch
in a go or should there be a more gradual rollout in order to learn from
localized experience and reduce the initial expenditure?
3. Which group should be targeted? Should the organization concentrate on
existing or new sector market? The authors say that this depends on the
nature of the product and perceptions of the target market and how it
responds.

4. How should it be launched?
Kotler P. (2006:656), advices management to rely on different strategies
like.
(i) Timing Strategy (WHEN)
Accompany may face three choices when it finds out that the competitor is
developing the same product they expect to launch. First entry, –This
enjoys "first mover advantages" of looking up key distributors, customer
and gaining leadership. Parallel entry- The firm might time its entry to
coincide with the competitor's entry. The market may pay more attention
when two companies are advertising the new product. Late entry –The firm
might delay its launch until after the competitor has entered. The
competitor will have borne the cost of educating the market and its product
may reveal fault the late entrant can avoid and learn the size of the
market.

(ii) Geographic Strategy (WHERE)
The decision of whether to launch the new product in a single locality, a
region, several regions, the national market, the international market
should be made .Most of businesses develop a planned market sellout over
time .For example Coca-cola launched its new soda, Citra, affairs-free, and
grape fruit flavored drink in about half of the united state.

(iii) Target Market Prospect (TO WHOM)
Within the sellout markets, the company must target its initial
distribution and promotion to the best prospect groups.

(iv) Introductory Market Strategy (HOW)
The plan for introducing the new product into the rollout markets must be
developed.



2.2 CHART ILLUSTRATION FOR PRODUCT DEVELOPMENT PROCESS
Kotler P. (2006:640)


Yes Yes Yes Yes
Yes Yes Yes































No No No No
No No






After Commercialization future plans are to be made.



2.1.5 A BUDGET FOR NEW PRODUCT DEVELOPMENT

Kotler P. ( 2006:638) advices the companies to decide on how much to budget
for new product development .He adds that research and development outcomes
are so certain that it is difficult to use normal investment criteria.
Companies have to project as many projects as possible, hoping to achieve
few winners. Kolter says that there are companies which apply convectional
percentage sales figures or spend what their competitors spend. Still other
companies decide how many successful new products they needs and work
backward to estimate the required investment.


TABLE 2.3 AN EXAMPLE ON HOW A COMPANY CAN CALCULATE COSTS
OF NEW PRODUCTS TO BE DEVELOPED


" "
"Stage "
" "
"Number of Ideas "
"Pass ratio "
"Cost per product Idea in USD $ "
"Total Cost in USD$ "
" "
"1 "
"Idea screening "
"64 "
"1:4 "
"1,000 "
"64,000 "
" "
"2 "
"Concept testing "
"16 "
"1:2 "
"20,000 "
"320,000 "
" "
"3 "
"Product Development "
"8 "
"1:2 "
"200,000 "
"1600,000 "
" "
"4 "
"Test Marketing "
"4 "
"1:2 "
"500,000 "
"2000,000 "
" "
"5 "
"National launch "
"2 "
"1:2 "
"5,000,000 "
"10,000,000 "
" "
" "
" "
" "
" "
"$5,721,000 "
"$13,984,000 "
" "


2.1.6 PROTECTING NEW PRODUCTS

Wikipedia the free encyclopedia reminds the companies to be considerable to
the effort they made in product development process by protecting their
products. It depicts that the products may be legally protected by patents,
trademarks, service mark, trade names, copyrights and trade secrets. It's
necessary to know which are applicable and when each is appropriate.
The encyclopedia adds that generally copy rights are fairly easy to obtain
but are applicable only in certain instances. Patents on the other hand
tend to involve complex claims and approval process, tend to be expensive
to obtain and even more expensive to defend and preserve.




2.2 EMPERICAL REVIEW

Deloitte's Global Benchmark study (2004) in Mastering Innovation came out
with the latest findings from initial group of 650 leading manufactures
worldwide. The report says that, Manufactures cite launching new products
and services as the No 1 deriver of revenue, growth, also view supporting
product innovation as one of the most important priorities.
The other finding was the reluctance to allocate additional spending on
research and development .Lastly he found that, by 2010, products
representing more than 70% of to day's sales will be obsolete due to
changing customer demands and competitive offerings.
Nelson King, Ph. D. Candidate, University of Southern California (2004) in
his study on new product development effectiveness through managing
uncertainty in the concept definition phase, found that:
In order to improve effectiveness in product development process, clear
goals and specifications must be generated during the concept definition
phase. Also he added that, New Product development (NPD) organizations are
adapting techniques such as cross-functional teams, stage-gate systems and
quality function deployment (QFD) to reduce uncertainty that contributes to
poorly defined product concepts. This research attempted to explain why
some techniques are more useful in reducing uncertainty than others during
the concept definition phase by addressing which uncertainties are most
important to resolve during the concept definition phase for an effective
product development.
The Operational Excellence Practice (2000) on its research report on
Product Development Support within the organizations designed a Product
Development Framework that provides a structured approach to integrating
customer needs with manufacturing capabilities. The framework consists of
six elements: strategy, process, methods, tools, organization, and
management. The foundation is an understanding of customer needs and market
opportunities. It enables strategic choices between incremental, platform,
and breakthrough development projects. The selected projects follow a
concurrent and phased development process. Methods and tools such as
"managing the front end," target costing, Quality Function Deployment
(QFD), variety reduction, and product-data-management improve efficiency
and effectiveness. Organization structure has a dramatic effect on
development cycle time and is altered to support the development strategy.
Finally, management of the development framework requires setting goals,
measuring performance, appointing a development process owner, and
continuously improving.

The research report concluded that accelerated product development enables
the company to meet the demands of sophisticated customers with products
tailored to their preferences. It provides market leadership through faster
payback on investment, higher market share, and increased profitability
compared to the competition.
" "

Rama Y. and Paul H. (1996) in their report on Global markets and new
product development, explain the globalization of new products with the
help of a global new product development model. They provide a framework
for the new product development process, bearing in mind the increasing
globalization of markets. They conclude that for the firm to achieve
effectiveness in product development, joint functioning of engineering,
marketing, market research, R&D and management is needed from the first
stage of product development.
Vishag B. and Dennis B. A (2008), in their study on effective virtual
new product development teams, conclude that, factors impacting effective
virtual interactions and new product development are improved decision
quality and decision speed also increased levels of creativity,
innovativeness, and product development speed

CHAPTER THREE


3.0 RESEARCH METHODOLOGY





3.1 RESEARCH DESIGN

Since the research problem was well defined and the objectives were known,
descriptive research design had to be employed. This design is flexible in
the sense that various methods of data collection were used. In this a
Cross-sectional descriptive design was adopted. It's sometimes called
survey and being conducted in a single phase model in order to provide snap
short picture of the market. It involved the sampling of interest and the
information obtained was generalized to the population.


3.2 UNIT OF INQUIRY

The study involved not less than 60 respondents. These included CBA staff
members in both headquarters and the branch, the customers of bank's
products and services and advertising agents. All were highly considered in
this study.


3.3 SAMPLING TECHNIQUES

A sample was taken from a population. The inference about the population
which based on the relevant information obtained from the sample was made.
The assumption in this case was, "the sample is the representative of the
population and any data collected from it can be applied to all members of
the population". Both probability and Non-Probability sampling were used.
Probability Sampling
In this simple and stratified sampling was employed due to the reason that
the firm develops and offers different products and services.
Non- Probability Sampling
This was very useful for pre-testing questionnaires and for a well known
targeted population. As the population was known, judgmental sampling was
helpful in collecting data.







3.4 DATA COLLECTION METHODS

Both primary and secondary data collection methods were applied to ensure
that the study become more recent with comparison to past researches.

3.4.1 Primary Data

Being raw data, the following techniques were employed.
Personal Interview
Face to face conversation was conducted between the researcher and the few
respondents selected at random. In order to get relevant and correct in
formation, undisguised interview was used.
Questionnaire
The selected sample was distributed with questionnaires. The majority
filled and returned them. Staff members got these questionnaires through e-
mails. Both structured and unstructured questionnaires were prepared.
Observation
As the researcher was participating in a day to day marketing activities
conducted by CBA, un-obstructive non-reactionary observation technique was
used to collect more data. In this, simple observation method was employed
by the researcher as the visible and participant observer.

3.4.2 Secondary Data

The aim of secondary data was to know what CBA was doing previously,
current strategies and future plans in product development. Different
people and agencies including the bank itself were consulted for
documentation. From the bank, data within marketing and product
development, finance and corporate departments were helpful. Other
business agencies and consultants like ZK advertising agents were consulted
for this.

3.5 DATA ANALYSIS

The obtained data from both secondary and primary sources were coded
quantitatively and qualitatively respectively in quantifying the data. The
information obtained was summarized into different forms specifically in
tables, charts and percentages. This gave out clear view of the
effectiveness of the product development activities done by CBA.

CHAPTER FOUR


4.0 RESEARCH FINDINGS, ANALYSIS AND INTERPRETATION


4.1 INTRODUCTION

This chapter presents and interprets what a researcher found in his field
work. Different methods of data collection were used in making sure that
relevant information is obtained. These methods included personal
interview, mailing, group discussion, questionnaires, observation, official
documents, business journals and the internet.

38 questionnaires were prepared for CBA customers. Among these 32 were
returned answered/ filled. 19 CBA staff members were involved in the study
by interviewing them and via mailing the questionnaires. Approximately 85%
of the targeted population for this research responded positively. A day to
day participation of the researcher to the firm's activities made him come
up with other findings which made this research successful and valuable.

Quantitatively and qualitatively, data were presented, analyzed and lastly
interpreted to add value and differentiation in data presentation.

Basically, the research findings discussed in this chapter were obtained
and presented as per research questions .This has been used as a frame work
for data analysis, for example; the presentation of each question with its
answers. Other findings are presented from researcher's observation rather
than research questions.










4.2 FINDINGS, ANALYSIS AND INTERPRETATION


4.2.1 How Does CBA Generate Product Idea?

This involved staff only. The total number of respondents was 19.

PRESENTATION
TABLE: 4.1 NUMBERS OF RESPONDENTS AND PERCENTAGES
"SOURCE OF IDEA "RESPONDENTS "PERCENTAGES (%) "
"Better performance of "8 "42 "
"CBA Kenya products " " "
"Products that perform "6 "31 "
"well in Tanzanian " " "
"market " " "
"A need to raise the "3 "16 "
"income of the Bank " " "
"Customer needs and "2 "11 "
"wants " " "
"TOTAL "19 "100 "


Source: JANUARY, 2008 RESEARCH FINDINGS

From the table above 42% of the idea generation for CBA's products come
from the performance of CBA Kenya products. It's because CBA Kenya is the
mother bank of CBA Tanzania. Most of the products offered by CBA Kenya
aren't widely provided by Tanzanian banks. This is the reason why CBA's
products seem to be unique in the market for example CBA Premium Finance
that aims to pay annual insurance bills for both account and non – account
holders.

31% of the response shows that CBA always needs to retain its customers by
making sure that it sometimes provides products which are offered by the
competitors but with an improvement. This holds the customers and prevents
them from shifting to the products of competitors. 16% shows that the bank
sometimes introduces new products which may raise income to some areas
within the bank to address some needs. For example Pro- saver a/c. which
encourages savings therefore increases cash to the bank. 11% implies that
the bank is customer oriented. It gives what the customers need by
providing customer satisfying products when the customers ask for them in
one way or another. For example: Optimum a/c where one saves for a specific
purpose.
On the other hand, from researcher's findings, it has been revealed that
sometimes opportunities opening up as the result of growth of certain
industries in the economy, are sources of product ideas for many banks CBA
inclusive. These include: construction, transportation, mining, tourism,
livestock products, agro-processing sectors and increased demand for
housing facilities. For example the development of Tanapa Exim card for
tour operators offered by Exim bank.
Also government policy shift and concentration, for example MKUKUTA in
Tanzania which calls for all banks to develop products tailored for SMEs.
All ways used by CBA in developing product idea seem to be effective but to
add value in it; the bank has to encourage participation of employees in
idea generation process.

4.2.2 What Type Of Products Does CBA Develop?

This involved staff members who were 19 in number.

PRESENTATION
TABLE: 4.2 NUMBERS OF RESPONDENTS AND PERCENTAGES
"TYPE OF PRODUCT "NO. OF RESPONDENTS "PERCENTAGE (%) "
"New to the world "0 "0 "
"product " " "
"New product lines "4 "21 "
"Revision and "1 "5 "
"improvements of " " "
"Existing products " " "
"Repositioning product "11 "58 "
"Line extensions "3 "16 "
"Cost reduction product"0 "0 "
"TOTAL "19 "100 "


Source: JANUARY, 2008 RESEARCH FINDINGS
From the presentation above, CBA doesn't develop exactly new to the world
products. 58% of the results depicts that CBA develops repositioning
products which create totally new markets. For example the development of
Optimum a/c.21% shows that CBA develops new products that seem to perform
well in the market. For example a current launching of Junior Saving a/c
called Young Champion a/c that seems to perform well in the market and
offered by many banks. For example with NMB it's Junior a/c, CRDB is Junior
Jumbo a/c, EXIM Bank is Nyota a/c, Azania Bank is Watoto a/c and NBC is
Chanua a/c. 5% are revised and improved products which are very few. 16%
shows that CBA extends its product lines by developing new products having
relationship with the previous ones.
Generally CBA develops most of retail products rather than corporate ones.
It's because these are highly demanded and fast moving products with very
few discouraging conditions.
CBA Tanzania Ltd has been able to bring in new products and services as
part of its innovations to creatively serve the Tanzanian market. Currently
the bank offers the following products and services.
Current A/c
Allows one to make and receive payments by cheque. It can be opened in Tshs
or USD. It's the main transaction a/c which provides core access to CBA
services
Features: Initial deposit in opening this account is Tshs. 100,000/- or 100
USD, cheque books are offered, availability of monthly bank statements,
bank cheques are issued when demanded, no deposit charges of cash/ cheques
and monthly charge for a ledger is Tshs. 15,000/- or 15 USD.
Saving A/c
Allows one to withdraw money at anytime and acquires an attractive
interest.
Features: Initial deposit for opening this account is Tshs. 50,000/= and
the interest earning amount is Tshs. 100,000/= while the saving a/c
identity card is given.
Notice A/c (Fixed Deposit A/C)
Enables one to earn interest for a very short period of time and still
gives access to the money to be withdrawn at any time.
Features: Opening balance is Tshs. 100 millions ,minimum interest bearing
balance is Tshs. 100 millions ,minimum a/c balance NIL ,minimum of 7 days/
1 week before any first withdraw ,Interest is Tshs. 7.5% while for USD
account is 3% and 48 hours notice by E- mail / writings is needed before
withdrawing the money.
CBA Premium Finance
The product aims to pay annual Insurance bills for both account and non –
account holders. It gives an opportunity to spread premium payment over a
predetermined period of up – to – ten months at a fixed rate of Interest.
The targeted market are individuals paying annual premiums at least Tshs.
418, 750 and NGOs. Also businesses paying annual premiums at least 837,500
Tshs. The bank finances the payments at once but a customer has to pay back
to the bank through monthly installments which will include principle and
interest. This eliminates the financial burden of lump – sum payment to the
customer by paying the insurance in installments and covers the stress
free.
CBA Home Finance (Asset Financing Facilities)
It's the way that allows one to buy his/ her dream home. CBA offers keys
to one's dream home by financing up to 100% costs of purchasing a house.
The product offers the ability to buy a house with simple long – term loan;
payable up to 15 years.
CBA Car Finance
It's a financing plan/ scheme that can finance 70% of he value of the car
one intends to buy. It's the other type of asset financing.
Other Products in Saving Plan.
(a)Pro – saver A/c
It's a bearing interest account that gives the flexibility of deposits and
withdraws. The opening balance is Tshs. 5 million or 5,000 USD which is
also a minimum interest bearing amount. Any amount below Tshs. 5 millions
or 5,000 USD will be charged. Two withdraws are allowed per month.
Competitive interest rate is paid quarterly.
(b)Young champions /c (Junior Savings)
It gives opportunity to parents to save for their kids below the age of 18
years old. The minimum balance eligible to earn interest is Tshs. 200,000
or USD 200. If the amount is untouched for two or more years the interest
rate increases accordingly.
(c)Optimum account
This allows one to save for a certain purpose. The targeted customers are
mostly middle to high income earners especially those who want to make long
term savings. The account exists in Tshs only and the minimum interest
earning amount is 200,000 Tshs. while four withdrawals are allowed yearly.

Other Products that CBA offers are: Overdraft services, Trade Finance
Products, Fund transfers, Guarantees, Invoice discounting, Short term loans
to finance business and Personal loans which has no restrictions on the use
of the borrowed funds.

4.2.3 Which Criteria Used In Choosing The Type Of Products Developed?


(Mainly Retail)

The following findings were according to the personal interview done by the
researcher to the staff.
A product is developed basically looking at its priority, how important it
is to the bank, how soon the customers want the product and according to an
event or circumstance. Any among those criteria would lead to the
availability of the product. A good example of these products is the
selling of NICO's shares in which CBA is one of the agents.

4.2.4 What Procedures Are Followed In Developing New Products?

The following procedures of Product development done by CBA is in
accordance to Mr. Abdallah Singano the head of Marketing and Product
Development at CBA.
To begin with, a proposal has to be made for the development of the
product. Once approved, a research is done where data will be collected and
analyzed. Then the process of writing a product program starts. The product
program is a guideline or policy for the product which shows how the
product works, guidelines, procedures and risks.
All relevant stakeholders within and outside the bank will be involved and
will also have to be briefed and do their part, i.e. Information technology
dept. will have to find out how the product will work in the system,
Finance dept. will advise how the product will be booked and the accounting
aspect of the product including the profitability analysis, Treasury dept.
will give out the pricing of the product with regard to the market rates,
etc.
Once the document is completed and all information put together, it will
have to be approved by the management.
The approved one will be taken to the agency; the staff will have to be
notified of the product before it is launched to the public. The sales team
is trained on how the product will work so that they can sell it.

4.2.5 How Does CBA Test The Market Of The New Developed Products?

The research normally gives out an indicative reaction to the public about
the product, but also the sales team goes and sells the product for a
period of 3 weeks to find out the reaction of the public and this gives the
dept. of marketing and product development first hand information whether
the product is good or there is anything to correct. This salesmanship
technique is very effective as the bank is able to get direct response from
the customers concerning new product developed.

4.2.6 How does CBA launch the developed products?

The developed product is launched through the media and that is by having a
press conference or a party. Adverts are also disseminated through the
media .Previously the bank was using Kabula Media Group Ltd. as the
publicizing and communications agent during press conferences. Now the bank
is trying to cut down costs of developing the products. That being the
case, all tasks concerning with publicity and communications during any
launch of the product has to be conducted by the dept. of Marketing and
Product Development. Though this system reduces costs, it isn't so
effective considering that the dept. has only one person who has to
undertake all tasks in this. Therefore the person is overloaded.

4.2.7 How Do The Customers Get Information On The Developed Products?
Customers normally find out about the products in the media, or in
brochures that are supplied after the launch of the product. The sales team
also tells customers of the features of the launched product.


The following are the results from customers' response to the
questionnaires.

PRESENTATION
TABLE: 4.3 NUMBERS OF RESPONDENTS AND THEIR PERCENTAGES
"Media " Number of Respondents"Percentage (%) "
"TVs "26 "81 "
"Radios "4 "13 "
"E-mails "0 "0 "
"Letters "2 "6 "
"Total "32 "100 "


Source: JANUARY, 2008 RESEARCH FINDINGS.
From the above presentation, the results show that CBA disseminate
information to its customers mainly via TVs as 26 respondents which is
equivalent to 81% responded on it. It's during evening sessions when people
are watching news after works .13% get through radios especially during
morning sessions when people are going for works. 6% are informed through
letters. These are mainly corporate and institutions for example Vodacom
and SOS Children Village where by the marketing and product development
manager has to write letters to different organizations to tell them what
the bank has developed by giving out its product profiles and prepare a
special package for them concerning offers, price and competitive benefits
to the customers. Via these means CBA has been very effective in informing
its customers on anything going on in it.

4.2.8 How does CBA protect the developed products against the competitors?

In banking Industry one can't stop competitors from copying the products.
What is done is, the product document which shows exactly how the product
functions is kept secretly and only shared between the senior managers
within the bank. By the system of copying the products, very few banks have
a sustainable competitive advantage in the industry.


4.3 COMPARISON OF CBA'S PRODUCTS WITH OTHER BANKS

This involved 32 customers only.

PRESENTATION
TABLE: 4.4 NUMBERS OF RESPONDENTS AND PERCENTAGES
" "Better "same "worse "Total"
"Quality of "11 "20 "1 "32 "
"products " " " " "
"Knowledge of "8 "24 "0 "32 "
"staff on the " " " " "
"products " " " " "
"Fees and "13 "21 "0 "32 "
"commissions " " " " "




Source: JANUARY, 2008 RESEARCH FINDINGS

According to the table and graph above, the customers gave the information
that, most of the products are not different from other banks in terms of
quality, knowledge of the staff, fees and commissions. From researcher's
observation, most of the staff members are not willing to know about the
products offered especially when one isn't in the service delivery dept.
Though every thing seems to be the same with other banks, service is the
only the differentiating entity which adds value to CBA's products. One
example of these services is "personalized banking experience". This
creates effectiveness in serving the customers.

4.4 THE PRODUCTS DEVELOPED BY OTHER BANKS WITHIN FOUR MONTHS (October 2007
to January 2008)

The following findings on the products developed by other banks within four
months show how stiff the competition is in developing products within
banking industry.

NMB
The bank developed a new system of offering some of its Services Free.
These include free in depositing, withdrawing, money transfer and balance
inquiry. The customers are able to withdraw any amount at their respective
branches (the branches they opened their accounts). When out of their
branches the limit is 2,000,000 Tshs. and any amount exceeding that is
charged 0.5%.Alsothe bank launched the NMB Wisdom Account. Via this all the
retired governmental officials will be able to get their pensions through
opening this account and operate it.

SCB
Standard Chartered Bank developed a Diva Club Account. It's an account for
women. It consists of both current and saving features.
As a current a/c, the opening balance is Tshs 100,000 with monthly fee of
Tshs 12,000.It has the following benefits to customers: Free Diva Visa
Debit Card, Free Cheque Book, Free ATM transactions, Free Monthly
statements, Free standing orders, Free cash deposits up to Tshs 50
millions, Free salary processing,1 Free banker's cheque per month, Sale of
Traveler's cheque.
As a saving a/c, the opening balance is 350,000 Tshs and no monthly fee for
balances above 5 millions. It has the following benefits to customers. Free
Diva Debit Card, Free ATM transaction, Free Monthly statements, free cash
deposits up to Tshs 50 millions and free local TT's.

BANK M
The bank doesn't only believe in introducing new products and service to
the financial market, but more so on providing "Money Back Guarantee"
service which is one of their strategies. It essentially offers customers
guaranteed services, plus an undertaking to compensate for processing risks
that may arise as service shortfall and deficiencies. The level of and rate
of compensation would be pre –agreed as integral components of business
transactions in a transparent manner. For example when one opens a current
account, the account becomes operational in less than 24hrs,banker's cheque
will be processed within eight minutes, while ordered cheque books will be
issued within the limits of 30 minutes. The bank guarantees an importing
company to get a copy of the transmitted SWIFT message within four hours
from the time an application for payments is received. To the other banks
this takes up to two or three days.

CRDB
The bank introduced Cash Deposit ATMs. These enable a customer to deposit
cash via ATMs therefore reduce unnecessary queuing which is the problem to
the other banks. Also the bank is very effective in advertising its
developed products. As soon as the products are launched, promoting
incentives like t-shirts, caps, key holders and the shopping bags for women
which advertised the use of Tembo cards.

TPB
The bank introduced SMS Banking through which a customer can access his or
her account via a phone. It can be balance inquiry or to know whether the
salary has been deposited by the employer or not.

EXIM BANK
The bank introduced Tanapa Exim card. It's issued to the account holders
with Exim bank. Any number of cards can be issued to the tour operators
depending on the vehicle they own. All cards are linked to the same current
a/c of the tour operator, so that the funds are directly debited to their
accounts. For tour operators who don't maintain accounts with Exim bank,
Prepaid Tanapa Exim cards will be provided. All these intend to eliminate
carrying of cheque or cash to the parks for the entry fees which is more
risk.
The other product was a Nyota a/c from a junior saving plan. The targeted
customers are the parents with the children aged below 18 years. The
product has the following features: Minimum balance is 10,000Tshs.It can be
in other currencies like USD/GBP/EURO 100, one can deposit as much as
he/she can and any amount depending on the size your wallet, in investing
one can choose to invest for a period of 3, 5 or 7 years and a healthy
accumulated sum is offered an interest.

AZANIA BANK
This Bank came with Kiseke Project Product. Under this, the Bank has been
given the opportunity by PPF to lend to its customers the houses PPF built
at Kiseke Mwanza.

KCB
The Bank introduced a saving plan for Muslims only. The account allows any
Muslim to open and access it with no charges. The aim is to raise the
standard of living of Muslims.




4.5 SAiOT ANALYSIS FOR CBA

STRENGTH
The financial strength that CBA Tanzania has is a full support from CBA
Kenya as the other bank.
The financial performance in 2006 benefited from the acquisition and
subsequent integration of the First American Bank of Kenya Limited (FABK)
in 2005, the acquisition of a 33.3% stake in AIG Kenya Insurance Company
Ltd and the acquisition of further 21% of equity of UBA which increased the
stake to 41% show that it has reasons of spreading in all regions of East
Africa and offers its specialized products and other services.
The bank has young, educated, dynamic, enthusiastic, hardworking and
creative workforce. Most of employees have experience of working with
multinational banks.
It has been at the bottom in the list of banks in terms of performance is a
challenge; hence there is a drive to push harder so as to get recognition.
That has already been done, by turning around the bank from a loss making
into profit making and challenging the old banks in the market.
Having a support of CBA Kenya which is among top performing banks in Kenya
and rated by global banking watch, it has a lot to gain in terms of cross
border businesses, i.e. business branching off from Nairobi to come and
invest in Tanzania, additional core capital, sharing of expertise, room for
training of the workforce and Investment in cutting edge technologies.
Being small, it has an advantage of fewer approval processes so it is
likely to leverage on turn-around times in loan granting.
It's being managed by 100% locals. This gives it a lot of support from the
Tanzania masses who feel they have long been looked down upon and
marginalized in their own country, in favor foreigners.
AREAS OF IMPROVEMENT
Improvement of Customer Service desk by training the personnel, adding
professional personnel and the separate desk of solving Customer
Queries.
Adding number of staff to the department of Marketing and Product
Development which will allow intensive market researches and add
effectiveness in product development process.
Involvement of staff members in product development idea generation.
Employee turnover as the biggest problem in CBA has to be overviewed
in order to reduce it. Employees do shift with product ideas from the
firm which threatens the successful development of CBA's product.
Internet Banking is to be established as soon as possible to overcome
branch network problem.

OPPORTUNITY
CBA Kenya
CBA Kenya has been very supportive since the taking over of the bank
(UBA).This has been proved by the capital injection in December 2006. Also
there is a commitment from the share holders for further injection of the
capital before the end of year 2008 as a basis for facilitating the
investment and business development plans within Tanzania. This also
gives room to take advantage of all cross border businesses and increase
ability to handle big customers with huge lending needs with support from
CBA Nairobi.
The bank has two sources of product development ideas. It's from Tanzanian
market and CBA Kenya. The bank has many more products it expects to copy
from CBA Kenya that will compete well in Tanzanian market. These include
Call Deposits, Internet Banking, Debit Cards-Visa Electron which is
accepted at more than 800,000 ATMs worldwide, Motor vehicle financing
including fleet financing for corporate and institutions to mention a few.
CBA Tanzania will benefit from the economies of scale, which comes with
better focused technology investment at CBA Kenya. For example, CBA Kenya
embarked on the CBA Enterprise Transformation (CET) project. This broader
project changed the operating system from Micro banker to TEMENOS T24, a
new generation technology core banking system.

Queuing In Other Banks
Queuing in other banks like NBC and NMB is a problem. The medium and high
net income earners individuals do search for the banks which don't have
queuing problem. It's an opportunity to the growing banks like CBA to
develop customer satisfying products and serve them well as they are idle
customers currently.

CSR
The setting up strategy to invest in Corporate Social Responsibility done
by CBA as the only way of giving back to the community has a great
opportunity to the bank. If a community is cared in aspects of education,
health, youth development and leadership, environmental conservation and
promoting the arts it feels recognized in the society. If the bank
maintains the relationship with these societies, it's an opportunity of
selling more products.



Type of Customers
The medium and high net worth individuals who are the customers of CBA are
many in Tanzania and can be easily accessed. These are very busy
individuals who are bored with unnecessary queuing in other Banks. If CBA
will succeed in developing all the products it intends and add personnel in
retail Banking, the bank will experience a sadden growth and reach its
targets within short period.


THREATS
Technological advancement
The rapid technological changes the banking industry faces is a threat to
CBA.CBA doesn't have ATMs which are able to serve customers with quick cash
demands 24 hrs daily. Also those banks with ATMs have advanced a lot in
supply chain network, services e.g. CRDB's ATMS are able to deposit cash
and they expect to regulate their charges e.g. NMB's ATMs give all the
services free.
The introduction of Umoja Switch ATM Cards which is the output of the joint
venture of six banks. These are Dar es salaam Community Bank, Azania Bank,
Akiba Commercial Bank, Twiga Bancorp, Bank of Africa (BOA) and Tanzania
Investment Bank, is a threat to CBA as customers may opt to purchase the
products from the other banks having easy access to ATMs.

Increase of the number of Financial Institution
There is an increase in Financial Institutions which offer many products
that are sold by Banks. For example the House Loan offered by CBA and
Azania Bank both in Tanzania is also offered by B Blue Financial Service.
At the same time international wise, SafariCOM has introduced M-PESA that
is making significant impact on the money transmission business in Kenya.




TABLE: 4.5 BRANCH NETWORK OF OTHER BANKS
"No. "NAME OF THE BANK "NUMBER OF BRANCHES "
"1 "NMB "121 "
"2 "CRDB "34 "
" " " "
"3 "STANDARDCHARTERED BANK "7 "
"4 "EXIM BANK "11 "
"5 "ACB "7 "
"6 "STANBIC BANK "9 "
"7 "BOA BANK "5 "
"8 "INTERNATIONAL COMMERCIAL BANK "5 "
"9 "AZANIA BANK "4 "
"10 "POSTAL BANK "Throughout the country "

As it can be seen in the above table, branch network for the other banks is
great. When these banks develop their products are sure of reaching many
customers within a very short time of period rather than CBA which has a
single branch.


Neglecting Micro Financing
The Tanzanian market has many customers who are low income earners. CBA is
being perceived as an elitist Bank and therefore loosing out the micro
finance customers who make the bulk of banking customers.
Most CBA products are not different from those offered by competitors;
hence any attempt by competitors to lower interest and other charges might
lure customers away.
All loan and advance products depend on the performance of the economy, if
any thing goes wrong, a good number of customers might end up non-
performing.


CHAPTER FIVE



5.0 CONCLUSION AND RECOMMENDATIONS

This part of the report gives an overview of the whole of researcher's
work. In recommendation, the researcher advices the firm of what to do in
relevant to the current competitive environment in banking industry.




5.1 CONCLUSION

CBA Tanzania does develop its type of products according to the needs of
the customers it has. These are medium and high net worth individuals,
Institutions and corporate. This makes the products of CBA to be more
specialized and with different fees, commissions and approach to customers
compared to the other banks.
According to the presented findings, when the products are effectively
developed introduced and offered to the market place they give up the
following results.
They position the firm to the customers' minds. Though CBA is still a
growing bank, by frequent development of the products and adverts, it
has positioned itself to the minds of customers and therefore
customers have great reputation to it. In advertisements and customer
communication, the bank is very effective as depicted in the findings.
For example, the tactic of allocating the billboards only to the
places where high net worth income earners can easily see them e.g.
The billboard put at the roundabout that joins Upanga and Oysterbay.,
sponsoring business news to the widely watched TV in the country (ITV)
and informing its customers via e-mails and letters on the products or
anything they have to know about the bank.
Increase the possibility of making markets. The system of press
conference done by CBA when launching its new products creates a need
to new customers which is an opportunity to the bank to serve more
customers and increase branches. But for it to be more effective, the
bank has to increase the staff members in marketing and product
development dept. Also to be punctual in offering the promoting
materials like wheel covers, t-shirts, shirts, key holders and the
like for each developed products soon after launching.
Satisfaction of customer needs. As the bank develops some of the
products with respect to customer needs, there is high possibility of
satisfying and retaining them.
Impact on sales. Effective product development has positive impact on
sales. In CBA as they are effective, there is an average of 4 new
customers daily that come for services (mainly saving and current
a/c). This makes an average of 120 customers per month as an increase.
Turnovers and Profits. From 2005 the bank has been developing products
as soon as the needs rise. This made advantageous move to profit
making bank rather than the loss making as it was before.




5.2 RECOMMENDATIONS


The bank has to make improvements on Customer Service desk by
training the personnel, adding professional personnel and developing
the separate desk of solving Customer Queries in time. From the
researcher's findings it shows that, many banks are busy in developing
different types of products. Copying competitor's products has become
one of marketing strategies, therefore the researcher advices CBA to
improve Customer Service and Care as the only differentiating entities
which can add value to the bank's products.


Adding number of staff to the department of Marketing and Product
Development which will allow intensive market researches for the
betterment of effective product development and delegation of powers.

Involvement of staff members in product development idea generation.

Employee turnover as the biggest problem in CBA has to be overviewed
in order to reduce it. Employees do shift with product ideas from the
firm which threatens the successful development of CBA's product. At
the same time they move out to the competitors with the secrets of the
bank.
Internet Banking is to be established as soon as possible in order to
overcome branch network problems so as the products will reach many
customers soon after launching them.


The medium and high net worth individuals who are the customers of
CBA are many in Tanzania and can be easily accessed. These are very
busy individuals who are bored with unnecessary queuing in other
Banks. If CBA succeeds in developing all the products it intends and
add personnel in Retail banking and Marketing Depts. for marketing and
selling those products, the bank will experience a sadden growth and
reach its targets within short period of time.

The Bank is being perceived as an elitist bank and therefore loosing
out the micro finance customers who make the bulk of banking
customers. Though their not the Bank's targeted customers, CBA has to
develop at least few Micro Finance banking products to capture these
customers as they may be the source of others. For example SMEs are
among the targeted customers of CBA. But the bank hasn't started fully
supporting them. These are increasing in number daily at the same time
the Tanzanian government do support them. It's a call to CBA to
develop special packages for them so as to create new opportunities to
the market.
Focusing the top end market, means being very selective in lending and
targeting top class customers who are also the target of competitors, the
risk of default of these customers is very high; take an example of
Scandinavia Bus Express. Its down turn caused a great stir to most big
banks which had loaned the company billions of shillings three years ago.




The bank may also develop the products that are highly needed in the market
but aren't in its product lines. The bank may decide to offer them with
flexibility in lending terms and conditions without affecting risk
mitigating covenants. These include;
Products that specifically target young entrepreneurs, i.e. loans for
professional graduates who wish to pursue own business dreams and
start up businesses.


Loans that assist people in constructing or finishing residential
houses. Currently the bank has a Mortgage finance facility which
enables customers to acquire constructed homes. There is an outcry
from the vast clienteles that; loans which are geared towards
financing certain stages of construction say finishing materials,
foundation, housing structure, house hold furniture would be much more
beneficial to the majority of Tanzanians in dire of housing
facilities.

Tourism related products, say special facility for construction of
Tourism Hotels, Cottages, Camping Sites and the like considering that
this is one of the most expanding industries. Loans to facilitate Agro-
processing. There are plenty of fruits and vegetables that end up
rotting due to lack of processing facilities in Tanzania.










BIBLIOGRAPHY

Abbot, L (1955) Quality and Competition, New York: Columbia University
Press

Booz, Allen and Homolton (BAH) (1982) New Product Management for the
1980`s,
New York: Booz, Allen and Homilton

CBA Annual Report and Financial Statements (2006-2007)

Deloitte`s Global Benchmark Study (2004) Mastering Innovation; Exploitation
ideas for profitable growth, published March 2004; Part 3 of Global
Benchmark Study

Kotler P. (1991) Marketing Management, 7th Ed, Prentice Hall
International (UK) Limited; London.

Kotler P. (1998) Marketing Management, Analysis, Planning, Implementation
and Control: Prentice Hall of India, New Delhi.

Kotler P. (2006) Marketing Management, 12th Ed, Pearson Education, Inc.
Upper Saddle River, New Jersey

Levitt T. (1976) 'The Augmented Product Concept' in Ruth berg, New York:
Free Press
Nelson King, Ph. D. Candidate, (2004) Research Report on new product
development effectiveness through managing uncertainty in the concept
definition phase; University of Southern California

Prof. Dr. Juergen Schwill, University of Applied Statistics Brandenburg;
Nov. 27/2006

Rama Y. and Paul H (1996) Research Report on Global markets and the new
product development process; Marketing Department, Texas A&M International
University, Laredo, Texas, USA

Richard M.S, Wilson and Colin Giligan (2005) 'Marketing Management' New
Delhi: Raji Press
Robertson R, S (1967) 'The process of Innovation and the Diffusion of
Innovation' Journal of Marketing, Vol.3 no. 1, January, pp. 14-19

Stanton W..J, Etzel, M. J and Walker B, J (1994) Fundamentals of
Marketing: Mc Grow-Hill, Inc. New York.

THE FOCUS-CBA Quarterly Magazine

The Operational Excellence Practice (2000), Research Report on Product
Development Support within the organizations, OPEXEL: USA

Vishag B and Denis B. A, (2008) Research Report on Effective virtual new
product development teams: Texas State University – San Marcos, San Marcos,
Texas, USA

Wilson and Fook (1987) 'Marketing Analysis and Planning' New York: Doyle

Websites Visited.
http://en.wikipedia. Org/wiki/New Product Development
http://www.skyfm.co.tz/ipp/financial/2004/12/01/financialwatch.htl
http://www.tanemb.se/combanks.htm
www.deloitte.com





APPENDICES


APPENDIX A


MARKETING AND PRODUCT DEVELOPMENT DEPARTMENT QUESTIONAIRE

Please help me in getting the answers of the following questions:

1. How are you generating ideas for new products?


2. What types of products do you develop?


3. What criteria do you use in choosing the types of pro ducts are you
developing?


4. What procedures do you follow in developing new products?


5. Which tactics are using in testing the market for new products
developed?

6. How do the customers get the information on the product developed?


7. How do you launch your developed products?


8. How do you protect your developed products against the competitors?










Regards; Jerome Msigwa

MZUMBE UNIVERSETY (MU)
APPENDIX B
RESEARCH QUESTIONS TO THE CUSTOMERS ON PRODUCT DEVELOPMENT DONE BY CBA
This research is conducted to assess the effectiveness of product
development at CBA. The results obtained will help the researcher in
developing his knowledge towards product development strategies and other
marketing issues. Also will help the management of CBA to identify current
key issues in product development as well as for record keeping. I kindly
request you to participate by providing relevant information via filling
this questionnaire. This will assist me to accomplish my research on
Assessment Son Product Development Strategies in Banking Industry.
The research report will be submitted to Mzumbe University as partial
fulfillment of my Bachelor Degree in Marketing Management.

Tick or Fill where appropriate.
1. Please specify your details below.
Name……………..
Work/Occupation
a) Employed ( )
b) Self Employed ( )
c) Student ( )
d) Other (Please Specify)…………………………..
……………………………………………………
2. Which products are you offered by CBA?
a) ……………………………
b) ……………………………
c) …………………………….
3. Do the products meet your needs/wants?
a) Certainly and Satisfactory ( )
b) Somehow ( )
c) Unsatisfactory ( )
4. What Products do the banks but CBA doesn't and you think are essential
to your needs? Please be specific.
a) ……………………..
b) ……………………...
c) ………………………
5. How can you compare CBA's Products with other banks in the following
criteria?

"Criteria "Better "Same "Worse "
"Quality of " " " "
"Products " " " "
"Knowledge of " " " "
"staffs on the " " " "
"products " " " "
"Fees and " " " "
"Commissions " " " "

6. How do you get information of the new products launched by CBA?
a) TVs ( )
b) Radios ( )
c) E-mails ( )
d) Letters ( )
e) Others (Specify)……………………………..
7. What threats do you think is facing CBA's Developed Products?
a) …………………
b) ………………….
c) …………………..
8. Any other comments?
………………………………………………………………………………………………
Date……………………………. Time………………………………………….

Thank you very much for your participation
APPENDIX C










-----------------------

5. Business Analysis: Will this product meet our profit goals?

2. Idea screening: Is the product idea compatible with company objectives,
strategies & resources?

1. Idea Generation: Is the idea worth conside
ring?

8. Commercialization: Are product sales meeting expecta
tions?

7. Market Testing: Have product sales met expect
ations?

6. Product Development: Have we got a technically sound product?

4.Marketingstrategy Development.can we find a cost-effective affordable
marketing strategy?

3. Concept development and testing: Canwefindgoodconceptconsumers saythey
would try?

Modify the product or marketing program

Send the Idea back for product developmment











DROP







Lay out future plans

Letters

E-mails

Radios

TVs

6%

0%

13%

81%

CUSTOMERS' INFORMATION SOURCE IN PIE CHART
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