Understanding the Effect of Digital Marketing in Achieving Competitive Advantage through the Quality of Banking Service: An Exploratory Study from the Point of View of a Sample of Rafidain Bank Customers in Iraq ()
1. Introduction
To create a safe banking environment, advanced software and modern technologies must be used in marketing banking services. These tools and techniques must also be continuously developed to keep pace with the rapid advancement of new technologies (Dhmaid, 2020).
For small and large businesses seeking to grow both domestically and globally, digital marketing has become a crucial ally (Apolinario & Soriano, 2021).
Digital marketing focuses on building mutually beneficial relationships with consumers and influencing their purchasing decisions by using tactics that encourage productive communication (Bedoya, 2023).
Furthermore, marketing has become an integral part of businesses’ basic strategies and identities, regardless of their size, as they deal with constantly changing market dynamics brought on by advancements in technology as well as changes in the attitudes and behaviors of consumers impacted by new products, as a result of this expanding digital environment, new patterns and contemporary consumption habits are emerging (Gonzalez, Perez and Duffus, 2022).
Technology now plays a major role in the race to excellence, especially for growing institutions, as it has impacted every aspect of life and made the actual market virtual, due to the heavy reliance on communication technology in various marketing activities, particularly those pertaining to customer communication techniques, interactive digital channels, and the emergence of what is known as digital marketing, these developments led to the creation of contemporary literature about the digital economy, e-commerce, and marketing, which in turn was not far from this digital revolution (Al-Saed, 2024).
Due to the necessity for monetary unification and improved, more effective financial services, the banking sector has undergone significant global transformation. This can be ascribed to the establishment of a somewhat globalized economy (Kurniawan et al., 2021).
The way that people and businesses obtain financial services has undergone a thorough transformation as a result of the advent of new technologies made possible by digitization and the Internet. As a result, the financial industry is facing more competition as a result of globalization and technological advancement, necessitating the development of innovative approaches to the provision of financial services (Sia et al., 2016).
To find out what distinguishes electronic marketing in achieving competitive advantage through the quality of banking service, we applied the research to the Rafidain Governmental Bank in Iraq from the point of view of its customers.
2. The Study Problem
The problem of the study lies in the traditional methods used by Iraqi banks in general and the Rafidain Bank in particular in providing banking services, and their failure to keep pace with the massive and rapid developments in communications technology, software, and the Internet, and their openness. For global markets it has become an important and urgent issue. This poses a real challenge to the managements of these banks in the inevitable shift to digital marketing and following appropriate strategies that enable them to compete and survive in the banking environment and provide appropriate services to achieve profitability as well as attract and retain customers. Hence the idea of research that revolves around the role that digital marketing plays in achieving competitive advantage through the quality of banking services provided by Al-Rafidain Bank in Iraq.
3. Objectives of the Study
1) Knowing the role of digital marketing in achieving the competitive advantage of Rafidain Bank in Iraq.
2) Finding the relationship and impact between digital marketing, competitive advantage, and quality of banking service.
3) Study the impact of digital marketing in achieving competitive advantage through the quality of banking service.
4) Determine the means and methods used in applying the digital marketing method and the obstacles it faces.
5) Identify the level of banking services provided through applying the digital marketing method in the bank under the study.
4. The Limits of the Study
4.1. Objective Limits
The basic variables addressed in the study are: digital marketing (as an independent variable) in its dimensions (Attraction, Engagement, Retain, Learning and Relating), competitive advantage (as a dependent variable), and quality of banking service (as an intermediary variable).
4.2. Human Limits
Employees working in all branches of Al-Rafidain Bank in Babil Governorate—Iraq.
4.3. Spatial Limits
Branches of Al-Rasheed Bank in Babil Governorate—Iraq.
4.4. Time Limits: Duration
From June to August/2024.
5. Proposed Study Model
The study model shown in Figure 1 below was created using the reviewed literature as a guide:
Figure 1. Study model.
6. Study Hypotheses
Given the problem and the study’s aims, the following can be determined about the study hypotheses:
H1: There is a significant impact of digital marketing on the quality of banking services in Rafidain Bank—Iraq at the sig. level of 0.05.
H2: There is a significant impact of digital marketing in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05.
H2a: There is a significant impact of digital marketing based on attraction in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05.
H2b: There is a significant impact of digital marketing based on engagement in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05.
H2c: There is a significant impact of digital marketing based on retain in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05.
H2d: There is a significant impact of digital marketing based on learning in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05.
H2e: There is a significant impact of digital marketing based on relating in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05.
H3: There is a significant impact of the quality of banking services in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05.
7. Study Methodology and Statistical Tools Used
The descriptive analytical strategy, which draws logical conclusions and a clear vision, and studies the factors that help determine the indicators and features of the field side of the study, was the appropriate method for analyzing the data used in this study. The data was analyzed using the statistical program (SPSS) and other statistical techniques, including standard deviations and a simple linear regression equation to ascertain the effect of the independent variable on the dependent variable, among others.
The research community consists of Rafidain Bank customers in five of its branches in Babil Governorate in Iraq. 65 paper copies of the questionnaire were distributed, which served as a means of collecting data randomly on the study sample, 60 questionnaires were retrieved and only 55 valid questionnaires were used for analysis, indicating a response rate of approximately 92%.
8. Brief about Rafidain Bank
Rafidain Bank is an Iraqi government bank, established under Law No. (A) of 1941 and started its work on 19/5/1941 with a paid-up capital of (50) fifty thousand dinars.
After going through many stages during its historical journey, the bank witnessed a new development in 1998, which is its transformation into a public company owned by the state in accordance with the provisions of public companies No. 22 of 1997 with the aim of contributing to supporting the national economy in the field of commercial banking, investing funds and providing financing to various sectors according to development plans and within the framework of the state’s economic, financial and monetary policies.
The government-owned Rafidain Bank (General Administration) adopts the following electronic systems: (Rafidain Banking Bulletin, 2013).
First: The Iraqi Payments System (IPS)
It is a system for exchanging electronic payments between banks through an efficient electronic network managed by the Central Bank of Iraq, which ensures completion during the working day with payment systems and the clearing process, and includes the following two systems:
Among the plans of the government-owned Rafidain Bank is to expand the horizons of banking cooperation with Arab and international banks by establishing banking relationships with them aimed at increasing the volume of foreign banking transactions by opening (documentary credits, issuing letters of guarantee, conducting investment operations and foreign transfers and striving to achieve electronic card payment for retirees outside Iraq) (Rafidain Banking Bulletin 2014).
Second: Electronic payment tools
Iraqi banks currently use the electronic payment system under the management of the Central Bank of Iraq using a secure and effective network, and Rafidain Bank seeks to implement the electronic payment systems it deals with such as (A. ACH, G ffffff) as Rafidain Bank adopted the strategy of electronic dealing and moving away from the circulation of manual cash to limit cash by localizing salaries in the bank’s transactions, and the bank also worked to implement the following systems: (Marketing Research Department—Rafidain Bank (General Administration)).
1) My fingerprint guarantees me system, by canceling the condition of the guarantor to grant advances to retirees.
2) Compete with other banks in issuing electronic payment cards for employees of government departments whose salaries are domiciled with the bank.
3) The bank launches the “Reconciled Customer” award for customers who commit to updating their data according to the (KYC) form.
4) The bank provides ATM service by adopting the electronic payment card (MASTER CARD) and other payment cards.
5) Activate the service of transferring customers’ money electronically between the bank’s branches.
Despite all these efforts made by the bank’s management, and through inquiries from a number of branch and division officials in the bank, it became clear that the application of electronic marketing faces some difficulties because the idea is new and many customers still tend to traditional marketing. Despite this, officials seek to overcome the difficulties and move towards achieving their goals by providing a distinguished digital banking service.
9. Literature Review
Digital marketing refers to a collection of advertising and promotion methods and tactics used in the digital sphere, i.e., online and through other electronic media, in order to target a particular audience and produce quantifiable outcomes (Calle-Calderón, Erazo-Álvarez, & Narváez-Zurita, 2020). It is a new tool and technology that, in the current technological era, generates marketing success and increases market share through search engine optimization, social media, email marketing, video marketing, and website media (Hermawati et al., 2022).
It refers to controlling consumer interactions with the company via the use of computers and information and communications technology in order to promote goods and create win-win situations for both sides (Auso, 2014). According to (Zhagui Jiménez, 2023) digital marketing is the process of creating and distributing brand awareness through the use of the thirteen digital channels that are available in the digital world, including social media for content, pay-per-read advertising systems, email marketing, online banner ads, SEO, mobile markets like Google Play and Apple, and banners.
As per (Timilsina, 2017), social media is an excellent means of facilitating easy and affordable competition among many players. So, companies must use digital marketing and advertising into their online sales strategies in order to maximize their return on investment in this instrument and to obtain a sustained competitive advantage (Arce, 2019). Consequently, by utilizing the analytical tools offered by social media, particularly Facebook, a corporation or business owner can target any demographic with regard to age or gender (Arora et al., 2019).
The significance of marketing, both electronic and traditional, is underscored by the fact that it is an economic activity that is crucial to the microeconomic level and one of the fundamental administrative responsibilities of all profit-making and non-profit organizations (Zekai, 2010). According to (Abaenewe et al., 2013), the digital revolution has enhanced competitiveness across businesses, which has resulted in better services being offered to customers. With regard to banking transactions, most of the challenges that consumers have while transacting with banks have been mitigated by digital transformation (Eze and Egoro, 2016). Since all banks are doing to draw in and hold on to devoted consumers, competition has evolved into a healthy rivalry for leadership (Bakare and Ogundeji, 2018).
According to (Alikhani and Zare, 2018), digital banking services free up bank employees’ time and energy to concentrate on making money rather than doing the same tasks in customer support every day. Technology has made banking services easier to conduct, including money transfers, online shopping, banking transactions, and offer requests. All of these services and transactions are started and finished online, eliminating the need for customers to visit bank offices or deal with representatives in person. Young people and the social elite are drawn to it, and it permits market penetration (Udobi-Owoloja, 2022).
Given the intense competition, digital banking marketing has become critical. It has been observed that no bank can successfully conduct its banking operations without having an effective marketing management team that has the resources necessary to help the bank attract and retain new clients while also achieving its objectives (Dhmaid, 2020). Furthermore, this management is the primary force behind development, innovation, creativity, and incentives (Oweili & Salama, 2008).
As a result, the significance of marketing banking services stems from the fact that it is an essential function that aids in determining the requirements and preferences of bank clients, upholds the marketing industry, and endures the fierce competition from other financial institutions in order to pinpoint the target market, grow market share, and choose strategies for distribution and promotion when offering the service digital (Abu Zayed & Al-Derawi, 2016).
9.1. Digital Marketing Strategies
A company’s plan outlining how it will use online channels—social media, for the most part—to accomplish its marketing objectives is called a digital marketing strategy. Which channels will be utilized and how much money will need to be invested in them must be decided in the plan (Ngwa, 2021). Digital marketing strategies can take many forms, such as: social media campaigns, search engine optimization, email and video marketing, website and blogs, pay-per-click advertising, voice search optimization, content marketing strategy, and so on (Craig, 2021).
9.1.1. Social Media Marketing
Social media refers to the use of mobile and online technologies to create interactive discourse out of communication (Kaplan and Haenlein, 2010). The goal of social media marketing is to increase brand awareness. Campaigns in this area can be run on a variety of social media platforms or the ones that the target demographic utilizes most frequently. Social media marketing is thought to be the most successful digital marketing tactic because so many people spend their time on it. social media, particularly among millennials (Craig, 2021).
Companies are using social media marketing (SMM), a current trend in which they employ tools and tactics to communicate with customers, to reach a bigger audience with their marketing endeavors (Paquette, 2013). Social media platforms are utilized by businesses as marketing tools in an effort to reach a wider audience and enhance brand awareness (McCann and Barlow, 2015). Customers may use social media to learn how the business stands out from rivals, and when the time comes for them to place an order or make a purchase, the information available online will assist them in making that choice. Additionally, influencers can aid in the promotion of a business’s goods and services because they frequently succeed in recommending goods and services to the target audience (Alan, 2018).
9.1.2. Search Engine Optimization
The term “search engine optimization” (SEO) describes a group of techniques used to persuade search engines that your website is worthy of being listed first for keywords associated with your products or services (Soniya and Santhosh, 2018). The process of building your website to rank well for business-related keywords and phrases in search engine results is known as search engine optimization, the higher the keywords rank, the more people will view your website and become aware of your company, this marketing technique aims to increase website traffic by drawing in customers who are primarily looking for the products or services that the business offers (Alan, 2018). The process of making a website rank higher in search results is known as search engine optimization. Making sure the website yields the intended outcome is necessary to improve the business ranking of the organization. The algorithm makes use of specific keywords to guarantee the business’s listing in the top search engines (Barquin and Hv, 2015).
According to (Malhotra, 2017), this is the process by which a company’s website is ranked in search results through organic search results, which are determined by website traffic, keywords, and search queries. According to certain research, a high search engine optimization score can improve the caliber of search engine results and, consequently, the number of visitors that are satisfied (Berman and Katona, 2013). Additional research has also demonstrated that search engine optimization significantly and favorably influences the degree of competitive advantage by enhancing the user experience (Ahmed et al., 2013).
9.1.3. Email and Video Marketing
One of the fresh and creative methods for enabling interactive marketing is email (Jacqueline et al., 2016). Email marketing is the practice of sending promotional materials to people who have specifically requested them (Arnold, 2011). It entails providing current and potential consumers with product information via email (Adejoke & Adekemi, 2012).
Furthermore, an email marketing strategy tries to always be ahead of the curve in terms of what interest’s customers and to provide them with industry and personalized content, with a focus on preservation. It also focuses on bringing in new business and keeping hold of current ones, as well as increasing brand awareness and encouraging repeat purchases (Alan, 2018). It is the most widely used and affordable form of communication for a vast majority of people, and it can be customized precisely for each recipient (El-Gohary, 2011).
9.1.4. Website and Blogs
Blogs are online diaries that enable writers to share their thoughts and experiences in a certain field, maintain documentation, and communicate with readers through comments (Kaplan and Haenlein, 2010). It can be based on audio, image, text or video (Vickery and Wunsch-Vincent, 2007). Another type of blogging that is similar in functionality is called microblogging, or micro-blogs. However, the content of these blogs is mainly text-based and is restricted to a specific character count (O’connor, 2008). Research indicates that the correlation between blogs and websites has a moderate impact on competitive advantage (Muniroh et al., 2023).
9.2. Dimensions of Digital Marketing Adopted by the Study
Digital marketing is helpful in utilizing digital platforms, the Internet, and social media to create marketing strategies through exchanges and communications to draw in new clients Thus, the general view among researchers is that digital marketing focuses on five primary success aspects and the development of a new marketing model for social media and Internet environments. These dimensions are attraction, engagement communication, learning, and retention. As depicted in Figure 2 (Parsons et al., 1998).
Figure 2. Dimensions of digital marketing. Source: Parsons, Zeisser, & Waitman (1998: p. 35).
9.2.1. Attractive
Customers engage with interactive applications and websites linked to the brand by offering services that live up to their expectations and building a foundation to draw them in, this keeps the brand fresh in consumers’ minds and ensures that advertising windows and associated links receive attention (Simmons, 2007). Digital marketing, in contrast to traditional and direct marketing, depends on users willingly increasing the number of interactive applications—like websites—on the Internet in addition to subscribers or website visitors, by meeting their clients’ first needs for the service offered by the business, marketers might draw in new business, this is accomplished by means of linked links, advertising windows, and on-site advertisements (Chan and Guillet, 2011).
The attraction process has two main components, the first is the brand when using and correcting applications, as the process combines digital marketing (DM) and the marketing mix, which requires the brand to develop an interactive application for the service it is promoting (Parsons et al., 1998). The second component pertains to the economics of consumer attraction, as it involves costly digital applications, and aims to lower the cost of customer acquisition. Certain businesses employ diverse strategies to draw in clients, such as collaborating with nonprofit organizations, offering customer loyalty initiatives, or creating eco-friendly merchandise (Chan and Guillet, 2011).
9.2.2. Engage
Once consumers are attracted to the digital marketing platform, marketers must arouse their interest and encourage engagement in order to facilitate communication with the service, this is achieved by creating highly advanced applications or highly precise models that arouse the interest of the consumer and encourage engagement with these influencers (Dovaliene et al., 2015).
According to (Hub, 2021), delivering valuable content to customers and developing creative programming skills for interactive media (form) are the two essential components that make up the secret to customer engagement. Consequently, certain businesses endeavor to foster customer interaction by encouraging them to communicate with one another and form a virtual community of people who share an interest in the same marketing service; on the other hand, they focus on customers interacting with them to offer recommendations or develop the digital program that delivers the service (Chong et al., 2010a, 2010b). There exist alternative strategies to guarantee client involvement, such offering a user-friendly webpage with a substantial.
9.2.3. Retain
The importance of repeat visits by customers to the service provider’s website increases as they start engaging with relevant content and staying in touch with them over time, as building relationships and staying in touch with customers is even more important once they enter the site (Omar et al., 2012). User retention highlights the need for marketers to comprehend that, as opposed to being a one-time undertaking, digital marketing requires consistent resource commitments over time (Parsons et al., 1998).
The majority of studies show that customers won’t return to a website unless there is a compelling reason to do so, so marketers need to focus on the process of regularly updating the content that is made available to them or offering dynamic, ever-changing content, this will eventually give customers the option to purchase a good or service for less money (which is the most effective way to keep customers), or to introduce deals that will benefit them (Ghiselli and Ma, 2015). Businesses may also occasionally hold competitions for their patrons, send out announcements about events happening there, or take part in festivals to give the impression that they are providing everything the customer could possibly need to retain him (Chan and Guillet, 2011).
9.2.4. Learn
The utilization of learning and development resources in banks is regarded as one of the most significant sources of digital marketing, since the application is no longer restricted to training materials. It is now possible to take advantage of distance learning by offering courses through platforms for training and education, which makes the trend globally accepted and enables employees and customers to see, learn from, and interact with the internal and external worlds in a professional manner (Atshaya and Sristy, 2016).
Social media has made it possible for marketers to gain more insight into the views, behaviors, and demographics of their clientele, emails to advertisers containing this information may be sent, and surveys on consumer opinions are posted on billboards and digital screens (Omar et al., 2012). Regarding behavioral data, it can be retrieved from client records stored in computerized electronic files or by using the computer to capture mouse clicks, all of this aids in monitoring consumer behavior and then identifies the data that will best help improve digital marketing (Parsons et al., 1998).
9.2.5. Relating
Relating is one of the most significant chances for adding value in digital marketing; it is, in essence, the chance to tailor the product or marketing campaign to each individual customer and personalize the contact (Parsons et al., 1998).
Social media offers a unique chance to have two-way conversations and distribution with customers. Most businesses aim to post information about their activities on social media and blogs and maintain constant contact with their clients by organizing engaging activities and subjects that prompt them to share their experiences using the company’s services along with some basic details about it, or by posting a bulletin about the most recent events the business is hosting to keep clients informed (Henderson et al., 2014).
According to (Ghiselli and Ma, 2015), interacting with customers offers a chance to add value to digital marketing (DM) by facilitating interactions between the services rendered and reducing the time and effort required for multiple customers to market simultaneously, either singly or collectively. Additionally, customers can learn how to overcome obstacles they may encounter or how to take advantage of upcoming opportunities. As a result, marketers should constantly be thinking of new methods to incorporate social media into their offerings to the fullest extent possible (Dorman and Daoud, 2021).
10. Competitive Advantage
The capacity to outmaneuver present or prospective rivals is known as a competitive advantage, this can be achieved through a variety of tactics, regardless of the product industry or marketing (Gathua, 2014). A corporation can gain a competitive advantage by outperforming and outlasting its rivals through the achievement and delivery of superior results (Wang, 2011). According to (Kotler, 2000), it is the organizational capacity to operate in a way or in multiple ways that make it challenging for rivals to copy both now and in the future.
It may also be defined as the business’s capacity to deliver products and services that surpass client expectations and outperform the competition (Jones et al., 2018). When a business finds new techniques that outperform those employed by rivals and can apply these techniques in the field, it has a competitive advantage. This entails fostering innovation in the broadest sense (Porter, 1993). Today’s businesses need to find a proactive and innovative way to balance internal and external elements in order to get a competitive advantage (Barney, 2011). Furthermore, a business is considered to possess a competitive edge if it beats its rivals in luring and keeping clients as well as fending off outside influences (West et al., 2015).
According to (Papulová and Papula, 2015), a business has an advantage over rivals when it provides customers with more value, either by lowering costs or by providing more perks and services, furthermore, businesses who truly possess a competitive advantage are able to outperform their rivals in meeting client needs. The study (Mwangi, 2013) supported the idea that businesses have a competitive edge when they generate more economic value than their rivals.
10.1. Dimensions of Competitive Advantage Adopted by the Study
10.1.1. Delivery (Time)
In this dimension, the company concentrates on cutting down on time so that it can create new items or alter existing ones’ designs in response to consumer demands as quickly as feasible, three factors are taken into account by the organization: delivery speed, delivery on time, and development speed (Assaf, 2015). It is the entire amount of time needed to carry out the task from beginning to end, so businesses may consider this when vying for customers (Hayes et al., 1988). It is also a measure of companies’ commitment to delivery schedules agreed upon with customers, as the speed of product development also refers to the time factor, which is the period of time between generating the product idea until achieving the final design or production (Evans, 1993).
When businesses aim to shorten the time between receiving and accepting orders from customers and providing them with goods or services, delivery time can create a competitive advantage. In other words, lead time can give businesses a competitive edge when they strive to reduce the amount of time it takes to receive and accept orders from clients and deliver goods or services (Stonebrake and Leong, 1994).
10.1.2. Cost
Cost is a vital feature since most organizations analyze cost components to rationalize them and help determine competitive prices in an effort to obtain the lowest cost relative to their rivals (Bin Dida and Boucheqifa, 2021). There are three types of costs associated with quality: failure costs, evaluation costs, and preventative costs (Juran, 2004).
10.1.3. Quality
“Fitness for use” is how (Juran, 2004) defined quality, where the client determines what is fitness. Two aspects contribute to quality: the first is design quality, which is essentially function-driven design (Adam and Elbert, 1996). The second is conformance quality or the capacity of the organization to convert inputs into outputs that are compatible (Hill, 1993). Accordingly, a quality-focused approach will help the organization’s profitability and competitive advantage (Abou-Moghli et al., 2012).
Consequently, when a company produces goods or services of a high caliber, this raises the value of those goods and services in the eyes of the company’s clients. This gives the company the leverage to set a fair price and create its own competitive advantage, since every client wants high-quality products, and companies want to satisfy their needs by offering goods and services that live up to their expectations (Boubah, 2021).
10.1.4. Flexibility
The capacity to adapt to changes is known as flexibility (Forster, 2006). This refers to the ability to adjust output to changes in the environment or market demands (Evans, 1993). For a business to have a competitive advantage, flexibility is a crucial component. It illustrates how quickly the company responds to client requests by creating products that meet their needs (Obeidat et al., 2021).
11. Quality of Banking Service
The degree of service rendered in comparison to the expectations of the client is the key indicator of service quality “Providing high quality service ultimately means that the service meets customer expectations” (Fayrouz, 2011). Service quality is the difference between what clients believe the service has done and what they expected (Kuo, Wu and Deng, 2009). Studies have indicated that providing high-quality service is essential for an organization to succeed and endure in the current competitive landscape, this is because providing high-quality service fosters customer loyalty, draws in new business, improves the company’s reputation, lowers expenses, and boosts operational efficiency (Akbaba, 2006). In other words, every organization tries to provide the best service to its customers, as service quality is characterized by features such as intangibility, heterogeneity, and inseparability. Moreover, service quality is an important area due to its association with service companies (Saraei and Amini, 2012).
The quality of financial services defined as “the degree to which the bank is able to satisfy the needs of its customers and the degree to which the customers are satisfied with the services provided” (Mbama and Ezepne, 2018). When offering banking services, the bank management must make an effort to provide the conditions necessary for putting the dimensions of service quality into practice, they also need to encourage staff members to work toward closing the gap by exhibiting strong performance, responding promptly to guests’ requests, comprehending the issues they face, recognizing objections, giving them access to all necessary facilities, and keeping their word (Alall, 2024).
Furthermore, the quality of service is a crucial factor in the banking sector because it goes beyond simply satisfying customers’ expectations to exceed them. As a result, it is evident that the way in which banking clients view service quality has evolved over time (Talib et al., 2012).
11.1. Dimensions of Banking Service Quality
According to (Grönroos, 2001), there are two aspects of the quality of banking services, which are as follows:
11.1.1. Technical Quality
It emphasizes the parts of financial services that are quantitative, when it comes to ATMs, the precision, speed, and lack of malfunctions of the device serve as indicators of the technological quality of this service.
11.1.2. Functional Quality
When making a bank deposit, a customer’s desired quality is reflected in the manner in which service providers behave, present themselves, and interact with one another.
12. Digital Marketing and Competitive Advantage
The concept of marketing evolved from the production concept to the selling concept, then to the marketing concept, and ultimately to the social concept as a result of the enormous advancements the world has witnessed in all fields, through the social concept, its applications were posted on the Internet within the context of electronic marketing. Additionally, this global network has made it possible for businesses with wide-ranging interests to connect with customers worldwide (Bernard & Scharf, 2007).
Therefore, as more people use the Internet, more applications are being used, particularly in the area of commercial marketing, this is because digital marketing gives consumers more options, which has the potential to bring about significant benefits to consumers worldwide (Mamdouh, 2018). Digital marketing promotes and sells goods and services via online channels like social media, internet advertising, and content marketing. One of the greatest ways to easily and affordably compete against other players is through social media (Timilsina, 2017).
Consequently, a lot of businesses leverage digital marketing to strengthen their edge over competitors (Momaya, 2020). It contributes to both an increase in consumer brand awareness and brand loyalty (Jain et al., 2020). Research has demonstrated that through providing creative consumer experiences, digital marketing dramatically enhances business performance (Yasmin et al., 2015). Numerous scholars have examined corporate marketing strategies and the significance of competitive, goal-oriented branding and advertising (Alonso et al., 2021).
Several academics have examined business marketing strategies and the significance of competitive, goal-oriented branding and advertising (Tessitore et al., 2021). According to the study’s findings (Makau, 2021), digital marketing helps commercial banks maintain a competitive edge. The research (Shahbandi, 2024) also demonstrated that acquiring a competitive edge is facilitated by creating websites, reaching a wider audience, and leveraging email and communication channels in digital marketing. The study (Mahalaxmi and Ranjith, 2016) also shown how the digital marketing approach strengthened booksellers’ competitive edge. In a similar vein, a study by (Achieng, 2016) demonstrated that social media marketing significantly increased brand visibility and competitiveness.
In this study, the researcher aims to confirm the role of digital marketing in achieving a competitive advantage for institutions through the quality of the service they provide.
13. Data Analysis and Finding
13.1. Reliability of the Questionnaire
The Cronbach test was used to assess the reliability and validity of the questionnaire used in the study, both for the individual study variable paragraphs and for the entire questionnaire. According to the Cronbach test, all values are approved because they are more than 0.6 (Mohajan, 2017). As shown by the results shown in Table 1.
Table 1. Scale reliability.
Scale |
Cronbach’s alpha |
Items number |
Digital Marketing |
0.713 |
25 |
Quality of banking service |
0.791 |
9 |
Competitive Advantage |
0.946 |
9 |
Overall |
0.819 |
43 |
13.2. The Sample Members’ Demographic Characteristics
The demographic characteristics of the research sample, which consisted of (55) people, are displayed in Table 2 below:
The majority of the sample members are males, with their number reaching (36) individuals and a percentage of (65.5%).
The majority of the study sample members fall within the age group (31 - 50) years, with their number reaching (23) individuals and a percentage of (41.8%).
The majority of the sample members hold a (bachelor’s) degree, with their number reaching (17) individuals and a percentage of (30.9%), and the smallest number are those who hold a (postgraduate) degree, with their number reaching (11) individuals and a percentage of (20%).
As for the employment status (job), it was found that most of the sample members are from (free professions), with their number reaching (17) individuals and a percentage of (30.9%), while (students) are the least in number, with a percentage of (7) individuals and a percentage of (12.7%).
Table 2. Demographic factors of the sample.
% |
Frequency |
The details |
The factor |
65.5 |
36 |
Male |
Gender |
34.5 |
19 |
Female |
27.3 |
15 |
18 - 30 |
Age |
41.8 |
23 |
31 - 50 |
30.9 |
17 |
More than 50 |
23.6 |
13 |
High school diploma or less |
Educational level |
25.5 |
14 |
College student |
30.9 |
17 |
Bachelor’s |
20 |
11 |
Graduate university degree |
27.3 |
15 |
Government employee |
Function |
14.5 |
8 |
Private sector employee |
12.7 |
7 |
Student |
30.9 |
17 |
Freelancer |
14.5 |
8 |
Owner of company/project |
13.3. Data Analysis and Hypothesis Testing
Table 3. Analysis of correlation between study variables.
Correlations |
|
Attractive |
Engagement |
Retain |
Learning |
Relating |
Digital
Marketing |
Quality of Banking
Service |
Competitive Advantage |
Attractive |
Pearson
Correlation |
1 |
0.080 |
0.690** |
0.270* |
0.337* |
0.414** |
0.474* |
0.721** |
Sig. (2-tailed) |
|
0.560 |
0.000 |
0.046 |
0.012 |
0.002 |
0.043 |
0.017 |
N |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
Engagement |
Pearson
Correlation |
0.080 |
1 |
0.118 |
−0.174 |
−0.124 |
0.140 |
−0.102 |
−0.125 |
Sig. (2-tailed) |
0.560 |
|
0.392 |
0.203 |
0.366 |
0.307 |
0.460 |
0.363 |
N |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
Retain |
Pearson
Correlation |
0.690** |
0.118 |
1 |
0.330* |
0.353** |
0.401** |
0.555* |
0.795** |
Sig. (2-tailed) |
0.000 |
0.392 |
|
0.014 |
0.008 |
0.002 |
0.050 |
0.029 |
N |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
Learning |
Pearson
Correlation |
0.270* |
−0.174 |
0.330* |
1 |
0.732** |
0.840** |
0.479** |
0.777** |
Sig. (2-tailed) |
0.046 |
0.203 |
0.014 |
|
0.000 |
0.000 |
0.000 |
0.040 |
N |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
Relating |
Pearson
Correlation |
0.337* |
−0.124 |
0.353** |
0.732** |
1 |
0.780** |
0.634** |
0.797** |
Sig. (2-tailed) |
0.012 |
0.366 |
0.008 |
0.000 |
|
0.000 |
0.000 |
0.002 |
N |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
Digital Marketing |
Pearson
Correlation |
0.414** |
0.140 |
0.401** |
0.840** |
0.780** |
1 |
0.752** |
0.813** |
Sig. (2-tailed) |
0.002 |
0.307 |
0.002 |
0.000 |
0.000 |
|
0.000 |
0.020 |
N |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
Quality of Banking Service |
Pearson
Correlation |
0.274* |
−0.102 |
0.255 |
0.479** |
0.634** |
0.552** |
1 |
0.842** |
Sig. (2-tailed) |
0.043 |
0.460 |
0.060 |
0.000 |
0.000 |
0.000 |
|
0.000 |
N |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
Competitive
Advantage |
Pearson
Correlation |
0.721** |
−0.125 |
0.795** |
0.777** |
0.697** |
0.913* |
0.842** |
1 |
Sig. (2-tailed) |
0.017 |
0.363 |
0.029 |
0.040 |
0.002 |
0.020 |
0.000 |
|
N |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
55 |
**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed).
The findings of the correlation study between brand loyalty and personality are shown in Table 3 above, and they clearly show that:
First hypothesis (H1)
1) The correlation coefficient (0.752) and the probability value (Sig. = 0.000) are less than the significance level (0.05), which indicates that the two variables (digital marketing variable and quality of banking service) have a significant positive association.
2) The findings of the basic linear regression analysis between (the digital marketing variable and the banking service quality variable) show that the linear regression accounts for 56.5% of the changes in the banking service quality variable, with the remaining 43.5% potentially coming from the influence of other variables not included in this analysis. The value of R2 = 0.565 indicates this.
Based on the above, it is clear that there is an impact of digital marketing on the quality of banking services. This indicates the acceptance of the proposed hypothesis that states: “There is a significant impact of digital marketing on the quality of banking services in Rafidain Bank—Iraq at a significance level of (0.05)”.
Second hypothesis (H2)
1) There is a substantial positive association between the two variables (digital marketing and competitive advantage) according to the probability value (Sig. = 0.02), which is less than the significance level (0.05). Furthermore evident is the correlation coefficient value, which equals (0.813).
2) By means of the basic linear regression analysis’s findings It is evident from the value of R2 = 0.660 between the two variables discussed above that the linear regression accounts for 66% of the changes in competitive advantage, with the remaining 34% potentially coming from the contribution of other variables not looked at in this study.
Based on the above, it is clear that there is an impact of digital marketing on the competitive advantage. This indicates the acceptance of the proposed hypothesis that states: “There is a significant impact of digital marketing in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05”.
Third hypothesis (H2a)
1) There is a strong positive association between the two variables (attractiveness and competitive advantage), as it turns out that the probability value (Sig. = 0.017) is less than the significance level (0.05), and the correlation coefficient is equal to (0.721).
2) By means of the basic linear regression analysis’s findings It is evident from the value of R2 = 0.519 between the two variables discussed above that the linear regression accounts for 51.9% of the changes in competitive advantage, with the remaining 48.1% potentially coming from the contribution of other variables not looked at in this study.
Based on the above, it is clear that there is an impact of attraction on the competitive advantage. This indicates the acceptance of the proposed hypothesis that states: “There is a significant impact of digital marketing based on attraction in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05”.
Fourth hypothesis (H2b)
1) There is a weak negative correlation between the two variables (engagement and competitive advantage), which is indicated by the probability value (Sig. = 0.363) being greater than the significance level (0.05), and the correlation coefficient being (0.125).
2) The findings of the basic linear regression analysis between the two variables discussed above demonstrate that the linear regression accounts for 1.5% of the changes in the competitive advantage variable, with the remaining 98.5 percent potentially attributable to the influence of other variables not included in this analysis. This is indicated by the value of R2 = 0.015.
Based on the above, it is clear that there is no effect of engagement in achieving competitive advantage, which indicates (non-acceptance) of the proposed hypothesis, which states: “There is a significant impact of digital marketing based on engagement in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05.
Fifth hypothesis (H2c)
1) There is a strong positive correlation between the two variables (retention variable and competitive advantage variable), and this is indicated by the probability value (Sig. = 0.029) less than the significance level (0.05), and the correlation coefficient is (0.795).
2) By means of the basic linear regression analysis’s findings The value of R2 = 0.632 between the two variables mentioned above makes it evident that the linear regression accounts for 63.2% of the changes in competitive advantage, with the remaining 38.8% potentially coming from the contribution of other variables not looked at in this study.
Based on the above, it is clear that there is an impact of retain on the competitive advantage. This indicates the acceptance of the proposed hypothesis that states: “There is a significant impact of digital marketing based on retain in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05”.
Sixth hypothesis (H2d)
1) There is a strong positive connection between the two variables (learning and competitive advantage) based on the probability value (Sig. = 0.040) being smaller than the significance level (0.05). The correlation value is 0.777.
2) By means of the basic linear regression analysis’s findings It is evident from the value of R2 = 0.603 between the two variables discussed above that 60.3% of the changes in competitive advantage can be explained by linear regression, with the remaining 37.7% potentially coming from the contribution of other variables not looked at in this study.
Based on the above, it is clear that there is an impact of learning on the competitive advantage, this indicates the acceptance of the proposed hypothesis that states: “There is a significant impact of digital marketing based on learning in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05”.
Seventh hypothesis (H2e):
1) The two variables (relating and competitive advantage) have a significant positive correlation, as indicated by the probability value (Sig. = 0.002) being smaller than the significance level (0.05), and the correlation coefficient is equal to (0.797).
2) By means of the basic linear regression analysis’s findings, the relationship between the relating variable and the competitive advantage variable is evident in the value of R2 = 0.635, which suggests that 63.5 percent of the changes in the competitive advantage are explained by linear regression, with the remaining 36.5% potentially coming from the contribution of other variables not looked at in this study.
Based on the above, it is clear that there is an impact of relating on the competitive advantage. This indicates the acceptance of the proposed hypothesis that states: “There is a significant impact of digital marketing based on relating in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05”.
Eighth hypothesis (H3)
1) The “quality of banking services and competitive advantage” have a strong positive link, as indicated by the probability value (Sig. = 0.000) being smaller than the significance threshold (0.05) and correlation coefficient (0.842).
2) By means of the basic linear regression analysis’s findings The value of R2 = 0.708 between the two variables mentioned above makes it evident that the linear regression accounts for 70.8% of the changes in competitive advantage, with the remaining 29.2% possibly coming from the contribution of other variables not looked at in this study.
Based on the above, it is clear that there is an impact of quality of banking services on the competitive advantage. This indicates the acceptance of the proposed hypothesis that states: “There is a significant impact of the quality of banking services in achieving competitive advantage in Rafidain Bank—Iraq at the sig. level of 0.05”.
14. Discussion
The results of the data analysis reached the following:
There is an impact of banking service quality in achieving competitive advantage.
There is an overall impact of digital marketing in achieving competitive advantage.
There is a significant impact of digital marketing in its four dimensions (Attraction, Retain, Learn, and Relating) in achieving competitive advantage, except for the dimension (Engagement) which did not have a positive impact in achieving competitive advantage.
Regarding the type of mediation of the variable (banking service quality) that mediates the relationship between the independent variable (digital marketing) and the dependent variable (competitive advantage), it was found that the type of mediation is (total), as the value of the regression coefficient is (0.018) for the direct effect of the independent variable on the dependent variable in the presence of banking service quality, which is closer to zero than the value of the regression coefficient for the total effect between the independent and dependent variables, which is (0.229), and that this effect is insignificant, as the value of P-Value = (0.890) is greater than the significance level (0.05). See Figure 3 below:
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Figure 3. Linear regression values (mediation type).
15. Conclusion
Following an examination of the information and responses, the study came to the following conclusions:
1) Opinions varied regarding the bank’s desire to use multilingual banking applications to communicate with customers when providing digital services, which indicates that some bank departments do not adopt modern technologies, which negatively affects the provision of digital banking services in terms of efficiency, accuracy, affordability and achieving excellence.
2) Together with the clear discrepancy in respondents’ opinions about the bank’s use of interactive user interfaces, it also a discrepancy in respondents’ opinions about the bank’s ability to contact customer support at all hours of the day.
3) The findings demonstrated that the study sample’s consensus regarding the necessity of luring, retaining, and inspiring online clients in order to create and preserve a competitive edge.
4) Furthermore, the study showed that learning gives businesses a competitive edge by supplying knowledge about customer attitudes, problems, and solutions. Achieving excellence is also facilitated by interacting with clients and offering personal and other services. Achieving excellence is positively impacted by the bank’s delivery of relevant and quality information, which also strengthens user base development and customer connections.
5) The aforementioned findings serve as a reminder to bank management of the value of digital marketing in attaining excellence in the caliber of services offered.
16. Recommendations
1) Regarding future studies:
The researcher hopes to broaden the scope of future research in order to examine various public and private bank types as well as other factors like marketing mix, human capital, knowledge management, and industrial intelligence that could affect a banking business’s ability to gain a competitive edge.
2) As for banks and their administrations, including Rafidain Bank, the subject of the study, the researcher recommends the following:
To reach, engage and retain customers, managements must focus on implementing effective strategies, programs and technological tools as well as adopting contemporary e-marketing applications to deliver a range of e-banking services that remain relevant to the changing competitive market.
3) The need to investigate how consumers are becoming more accustomed to using electronic money in their banking transactions and to raise their level of electronic culture through engaging educational applications and initiatives that push people to progressively give up their use of paper money.
4) It is imperative to develop electronic mechanisms and sophisticated data analysis tools in order to assess customer opinions and behaviors and ascertain the degree of their satisfaction with electronically provided services. This will enable informed marketing decisions to be made with the goal of attaining excellence.