The Effects Of Sales Promotions On Customer Growth In The Nigerian Mobile Telecommunication Industry

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The Effects Of Sales Promotions On Customer Growth In The Nigerian Mobile Telecommunication Industry


Abstract


The purpose of this study was to find out the effects of promotions on customer growth in the Nigerian mobile telecommunication industry. The method adopted by this study was the sample survey method of study instead of a census. The semi-structured questionnaire is made up of both close and open-ended questions. The researcher sampled 50 staff members and 200 customers of Globacom Nigeria (Glo). It was revealed by the study that Globacom Nigeria (Glo) undertakes a number of promotions, which tend to have great influence on their customer growth. However, promotions appear to be but just one of the various factors that affect the customers? growth of the organization. The study implications are that, promotions have a great influence on the customer base of mobile telecommunication networks and therefore there is the need to put much effort into ensuring its success.


Chapter One


General Introduction

1.1 Background of the Study

Over the years the Telecommunication industry has grown to become a vital aspect of the prosperity levels of developed and developing economies. Through activities of the industry, opportunities are given towards effective and low cost search and exchange of information. According to Ahmad et al., (2011), the industry in recent times serves as a point sale to many organizations and companies across the globe through the provision of internet services.

In Nigeria six Mobile Telecommunication operators play the role of offering various services in their sector to consumers, making it one of the keenest competitive industries in the country and across Africa. The main mobile telecommunication operators in Nigeria are MTN, Vodafone, Airtel, Expresso, Globacom (Glo) and Globacom (Glo) (Sam and Buabeng, 2011). The privatization of the Nigeria Telecom Cooperation and the introduction of competition in the Telecommunication industry in 1996 paved way for the liberalization and deregulation of the telecom industry in Nigeria. The launching of the first cellular network in Nigeria took place in 1992 and has since then become one of the continents? widely used and popular mobile networks in relation to the earlier mentioned operators.

Promotion has therefore become one of the most important factors in ensuring success in the industry in terms of attracting and retaining as many customers as possible. This is in line with the view of Sam and Buabeng (2011) that the telecom companies in Nigeria have literally taken over the airwaves and streets, flooding consumers with one promotion or another. Also, Teunter (2002) reveals that much has been spent on promotions as compared to advertising in recent years by various companies across the globe. Through the use of promotions, telecommunications companies develop their positions and brands and also appear to their subscribers in today?s rapidly growing market. In light of this, there has been a rise in the mobile telecommunication subscriber base in Nigeria from 4.9 million in 2006 to 28,419,649 in 2004 (Sam & Buabeng, 2011).

Promotion strategies are implemented with the goals of keeping up with the current competition in the industry with the view of meeting the needs of customers. The various mobile operators seek to create awareness and also increase the usage rates of their products and services in order to attract and retain more customers (Kotler, 2007).
Owing to the above, it is obvious that there are many areas related to the effects of promotional strategies on customer growth in the Nigerian mobile telecommunication industry hence the basis of this study.


1.2 Problem Statement

A number of tools use in marketing communication are being utilized by telecommunication providers in Nigeria in order to ensure the retention and expansion of their customer base. Sales promotions for instance is used in Nigeria by mobile operators as an approach to degrade the competitive nature of their competitors in the sector by offering lower prices or other incentives (Ahmed et al., 2012).


1.3 Objective of the Study

The General objective of the study is to determine the impact of sales promotion on customers’ loyalty in the Nigerian Telecommunication Industry. Other specific objectives are:-

  1. To Determine the Impact of Premium Sales Promotion on Customer Patronage.
  2. To Examine the Role of Sales Promotion through Consumer Contest on Brand Switching.
  3. To Evaluate the Effectiveness of Sales Promotion on Customer Loyalty.

1.2 Research Questions

Given the objective of the study above, the following research questions are thus formulated to guide the study:

  1. What impact does Premium Sales Promotion has on Consumer Patronage in the Telecommunication Industry.
  2. How can Sales Promotion through Consumer Contest Impact on
    Brand Switching in the Telecommunication Industry.
  3. How does Sales Promotion Impact on Customer Loyalty in the Telecommunication Industry.

1.3 Research Hypotheses

To aid the successful completion of the study, the following research hypotheses were formulated by the researcher;

  1. H0: premium sales promotion does not have any significant impact on consumer’s patronage
    H1: premium sales promotion does have a significant impact on consumer’s patronage
  2. H02: there is no significant relationship between sales promotion and customer’s loyalty to a particular brand
    H2: there is a significant relationship between sales promotion and customer’s loyalty to a particular brand

1.4 Significance of the Study

It is believed that at the completion of the study, the findings will be of great importance to the marketing managers of Telecommunication Company, as the literature reviewed and the findings of the study seek to explore and examine the relationship between sales promotion and customer loyalty, the study will also be beneficial to the users of the services of the telecommunication company as the study will serve as a source of information to them on the efficiency of services rendered by different telecommunication companies. The study will also be useful to researchers, who intend to embark on a study in a similar topic as the study will serve as a reference point. Finally, the study will be useful to academia’s, students, teachers lecturers and the general public as the study will add to the pool of existing literature and contribute to knowledge.


1.5 Scope and Limitation of the Study

The scope of the study covers the impact of sales promotion on customers loyalty in the Nigerian telecommunication sector. In the cause of the study, there were some factors which limited the scope of the study

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational Privacy:

Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.


1.8 Operational Definition of Terms

Sales

Sales is activity related to selling or the amount of goods or services sold in a given time period.

Sales Promotion

Sales promotion is one of the elements of the promotional mix. Sales promotion uses both media and non-media marketing communications for a pre-determined, limited time to increase consumer demand

Telecommunication

Telecommunication is the transmission of signs, signals, messages, words, writings, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems

Customer Loyalty

Customer loyalty is the result of consistently positive emotional experience, physical attribute-based satisfaction and perceived value of an experience, which includes the product or services. Consider who you yourself are loyal to.


1.9 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study.

Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain the impact of sales promotion on consumers loyalty in the telecommunication sector

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of sales promotion and customers loyalty in the telecommunication sector.


5.2 Summary

The usage of GSM services is higher during sales promotion, which means an increase in patronage and level of sales as a result of the sales promotion. Furthermore, majority of the consumers preferred price offs/discount offer as promotional tools. Apart from this, sales promotion can make a subscriber to switch from one service provider to another. In view of this, sales promotion is necessary in the telecommunication sector in order to promote trial, switch, encourage brand loyalty, and improve sales profit level and having advantage over competitors in competitive environment.


5.3 Conclusion

Five marketing variables in Bearden et al. (2007) definition of marketing, product, price, distribution, promotion and customer service were examined in this study to determine their relative impact on customer satisfaction with regard to telecom services and by extension if customer satisfaction is sufficient in determining customer loyalty.

From the results, all the marketing variables positively affect customer satisfaction. It is important therefore for telecom operators to see how they can improve on customer satisfaction and subsequently customer loyalty. When customers are not satisfied, they will switch to alternatives (Cronin et al, 1992), (Oliver, 1999) and (Oyeniye and Abiodun 2010). That is why people end-up acquiring services from other networks. This also accounts in part, why many Nigerians carry multiple handsets. If more peopleare satisfied with an operator’s service, the customer base is likely to increase and subsequently profit margins will improve.


5.4 Recommendations

It is therefore recommended that, price offs/discount offers should be used more often, a good policy should be put in place by the telecommunication company to ensure that sales promotional activities are carried out frequently, while globacom and airtel with low level of usage should improve on their sales promotion in other to attract more customers


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