Abstract:
The main objective of this study was to examine the effect of promotion mix strategies on the
profitability in the case of Abay Bank at Molale Town administration. The conceptual framework
of the study was designed as promotion mix strategies, namely, Advertisement, Sales promotion,
Personal Selling, Public Relations and Publicity and direct marketing tools that the company
used to persuasively communicate customers’ value and build customer relationship and also
have an effect on banks profitability. These strategies were taken as independent variables and
Bank profitability was served as a dependent variable. The study adopted both quantitative and
qualitative research approaches to collect data from employees and customers in the Abay Bank
at Molale Town administration. The total population of the study was 367 respondents and
Purposive sampling was employed to select 14 samples from employees and applied Simple
random sampling technique to select 353 samples from customers. To achieve the objectives of
this study, questionnaires were distributed and then analyzed using descriptive and inferential
analyses with the help of SPSS statistical software programs. Pearson correlation and multiple
linear regression analysis were done to test the relationship between promotion mix elements
and Bank profit. The finding of the study shows that among the controllable promotion mix
elements, profitability increased by 0.42, 0.18, 0.19, and 0.105 times a one unit scale increment
of advertising, sales promotion, Personal Selling and Public relations and publicity respectively.
Those all have positive and statistically significant effect on Bank profitability. But in this study
direct marketing has a positive and insignificant effect on Bank profitability. The study
recommends that the Abay Bank can reconsider its promotion mix strategies to designing
effective and efficient strategies by focusing on the promotion mix tools that has a significant
effect on Bank profitability. Abay bank identifying these people is an important part of its market
research. It should catch it’s target customers’ attention and either convince them to buy or at
least state their opinion about the product. The result show that abay bank does not hold
preparatory and below educated customer. Since most people live in molale and surrounding
area were rural customer and farmer whose educational level is below preparatory, Abay bank
work more on this part.
