The Impact Of Sales Promotion On Customer’s Loyalty In The Nigerian Telecommunication Industry

Project and Seminar Material for Marketing

The Impact Of Sales Promotion On Customer’s Loyalty In The Nigerian Telecommunication Industry


Abstract


This study was carried out to examine the impact of sales promotion on customers’ loyalty in the Nigerian Telecommunication Industry using Asaba Metropolis, Oshimili South Local Government Area of Delta State as a case study. The study was carried out to determine whether there is a significant relationship between sales promotion and customers’ loyalty, identify the sales promotion strategies which influences customers’ loyalty, and ascertain the influence of sales promotion on customers’ loyalty in Telecommunication Industry. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of staff of Mobile Telecommunication Network (MTN) Nigeria Limited in Asaba Metropolis, Oshimili South Local Government Area of Delta State. In determining the sample size, the researcher conveniently selected 41 respondents and 35 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables and mean scores. While the hypotheses will be tested using Pearson correlation statistical tool, SPSS v23. The result of the findings reveals that there is a significant relationship between sales promotion and customers’ loyalty. Furthermore, the result of the findings reveals that sales promotion has a significant influences on customers’ loyalty in Telecommunication Industry as it enhances brand recognition, Enhances customers purchase intention, stimulates repeated purchases, promotes brand preference influences brand trust. Therefore, it is recommended that telecommunication companies should continue to ensure that they use advertising, personal selling and sales promotion to keep attracting customers by maintaining their current effort and improve on them when necessary through proper market investigation. To mention but a few.


Table of Content


  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of Content
  • List of Tables
  • Abstract

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organisations of the Study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity of the Study
  • 3.9 Reliability of the Study
  • 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Analysis of Data
  • 4.3 Answering Research Questions
  • 4.4 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • APPENDIX
  • QUESTIONNAIRE

Chapter One


Introduction

1.1 Background of the Study

Every firm aims to make profit. It is generally agreed that one of the keys to making profit is boosting sales. To boost sales, a substantial number of customers must choose one’s product over and above that of its competitors on a substantial number of occasions. One of the surest way of ensuring this happens is to cultivate brand loyalty to one’s product or service.

Brand loyal consumers are more likely to choose their preferred products and /or service over its competitors on a consistent basis. Considering the fact that consumers tend to be finicky with their choices, producers of rival brands tend to be uncompromising with product or service quality while being relentless with their marketing, wiggle room for product in a highly competitive environment is little or nonexistent and the margin of error is narrow. Brand loyal consumers tend to serve as a crucial even if sometimes unconscious support base for product and/or service is the fierce battle for patronage.

For any organization therefore broadening and deepening the base of brand loyal consumers is a key objective in fashioning out any marketing strategy for the brand. Indeed, brand loyalty has been proclaimed by some as the ultimate goal of marketing (Reicheld and Sasser, 1990).

Hence, this concern led to the study of sales promotion as it relates to customer loyalty. Sales promotion is inevitable for any type of organization that wants to stimulate sales.

According to the American Marketing Association (AMA) defines sales promotion as “media and non media marketing pressure applied for a predetermined, limited period of time in order to stimulate trial, increase consumer demand, or improve product quality”. But this definition does not capture all the elements of modern sales promotion.

Schoell and Guiltinan (1996) sees Sales promotion as any activity that offers an incentive for a limited period to induce a desired response for target customers, company sales people, or intermediaries.

Jobber (2004) simply captures sales promotion as a package of incentives to consumers or the trade that are designed to stimulate purchase. Sales promotion, a key ingredient in marketing campaigns, consists of a collection on incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers of the trade (Kotler and Keller, 2009). Sales promotion plays an important role in retaining old consumers and attracting new ones.

It has being established in literature that only consumers with repeat purchases are profitable (Nagar, 2009). This shows that sales promotion is vital and research must be done to explore it full potential fully. Against the background, this research work strives to broaden our understanding as it appears that sales promotion has to be integrated in order to gain customers’ loyalty in the Nigeria telecommunication industry. In Nigeria, the telecommunication sector is highly competitive and telecommunication operators attempt to appeal and win customers through various sales promotion strategies.

The Nigerian telecommunication industry is entering its maturity phase, with reducing average profit. With fierce competitive, telecommunication operators must work hard to reduce cost, win new customers and retain existing ones and increase profit to ensure sustainable development of their businesses.


1.2 Statement of the Problem.

Every supplier wants to create and retain a loyal customer who engages in continued profitable business with him. Customer loyalty is the measure of success of the supplier in retaining a long term relationship with the customer.

Marketers across the globe have to use sales promotional resources available to them efficiently and not to waste them under any circumstances.

Worldwide survey indicates that consumers globally are changing their behavior towards product and services. Hence competitors seem to develop any available sales promotional strategy to retain existing customers.

The challenges of sales promotion is that its activities are required to generate awareness about not only their presence but also accentuate the importance of the brand, constantly emphasizing on the brand, the purchase of which would bring a host of other benefits for customers who buy the brand.

The brand should be strong enough and should have enough qualities to motivate the consumers to buy it again once the sales promotional activities has succeeded in enabling the customer to buy the brand.

There is also a challenge of maintaining the market pressure of the brand. This happens through the constant emergence of new sales promotional activities for short time periods that main the freshness of the brand.

A sales promotion makes up one of the seven part of promotional mix. One of the benefits organization would derive from good sales promotion is that it can create up sell or cross sell opportunities for a business. Up sell or cross sell opportunities can result in word-of-mouth business from satisfies customer. This will generate more profit which can also be considered another benefit.

The sales promotion can also cause the company to focus on marketing and create creative tasks for the marketing team at the company.


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. Determine whether there is a significant relationship between sales promotion and customers’ loyalty.
  2. Identify the sales promotion strategies which influences customers’ loyalty. Coupons , Bonus , Premiums, & Gifting
  3. Ascertain the influence of sales promotion on customers’ loyalty in Telecommunication Industry.

1.4 Research Questions

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

  1. Is there a significant relationship between sales promotion and customers’ loyalty?
  2. What are the sales promotion strategies which influences customers’ loyalty?
  3. What is the influence of sales promotion on customers’ loyalty in Telecommunication Industry?

1.5 Statement of Hypotheses

The hypotheses formulated for this study are:

  • Ho: There is no positive Relationship between Sales Promotion and Customer Loyalty.
  • Ho: There is a positive Relationship between Sales Promotion and Customer Loyalty.

1.6 Significance of the Study

The result of this study will be of great importance to Executives of firms in the Telecommunication Industry who are looking for ways to gain an advantage over rival firms and sustain their firm’s competitiveness in the industry.

Furthermore, this study is relevant to consumers who by virtue of promotional activities patronizes firms and become loyal to them. They consider themselves as kings because they have several choices to make among alternative products and services.

The study will equally be of immense benefit to other researchers who may want to conduct further research on the areas of sales.


1.7 Scope of the Study

The study is carried out within Asaba Metropolis, Oshimili South Local Government Area of Delta State, Nigeria. The study focuses at the Mobile Telecommunication Network (MTN) Nigeria Limited, one of the top leading Telecommunication Industry in Nigeria.

The sampling objects used in the study are executives and customers/users of MTN in the Telecommunication industry. It is presumed that this group of people could provide more informed responses to the questions contained in the questionnaire relating to the title of the study.


1.8 Limitation of the Study

This study is limited by some factors. They includes:

Secrecy:

Many people tend to dislike activities that appear to be probing them. They appear to have special liking for secrecy, thereby tend to avoid researchers.

Illiteracy:

A reasonable percentage of the population in developing countries like Nigeria cannot read and write and can hardly be useful for any meaningful research.

Existence of Bias:

While filling the questionnaire, personal biases of the Respondents might affect the responses.

Inadequate Funding:

Research activity can be a very expensive venture that often cost a lot of money. To this extent, finance constitutes a serious setback in this study.

Time:

Research work needs adequate time to be allotted to it but since most research work are done on limited time, proper information are not completely harnessed.


1.9 Definitions of Terms

Sales Promotion:

Premium, discount, and other non-current selling efforts are examples of marketing tactics other than advertising, personal selling, and publicity that are aimed to encourage consumer purchase and dealer effectiveness.

Customers / Buyer:

A person, a group of people, or an organization that buys goods and services is referred to as a customer or a buyer.

Product:

A product is anything real or intangible that is offered to the market for consideration, acquisition, usage, or consumption in order to fulfil a want or need.


1.10 Organization of the Studies

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.


Chapter Five


Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings on the impact of sales promotion on customers’ loyalty in the Nigerian Telecommunication Industry using Asaba Metropolis, Oshimili South Local Government Area of Delta State as a case study. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was to examine the impact of sales promotion on customers’ loyalty in the Nigerian Telecommunication Industry using Asaba Metropolis, Oshimili South Local Government Area of Delta State as a case study. The study was specifically carried out to determine whether there is a significant relationship between sales promotion and customers’ loyalty, identify the sales promotion strategies which influences customers’ loyalty, and ascertain the influence of sales promotion on customers’ loyalty in Telecommunication Industry.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 35 responses were validated from the enrolled participants where all respondent were staff of Mobile Telecommunication Network (MTN) Nigeria Limited in Asaba Metropolis, Oshimili South Local Government Area of Delta State.


5.3 Conclusions

Based on the findings of this study, the researcher concluded that;

  1. There is a significant relationship between sales promotion and customers’ loyalty.
  2. The sales promotion strategies which influences customers’ loyalty includes: coupons, bonuses, premiums, & gifting.
  3. Sales promotion has a significant influences on customers’ loyalty in Telecommunication Industry as it enhances brand recognition, enhances customers purchase intention, stimulates repeated purchases, promotes brand preference influences brand trust.

5.4 Recommendations

Based on the findings of the study, the following recommendations are proffered.

  1. Telecommunication companies should continue to ensure that they use advertising, personal selling and sales promotion to keep attracting customers by maintaining their current effort and improve on them when necessary through proper market investigation.
  2. Telecommunication firms and similar organisations should put in effective strategies to manage the marketing activities that influence customer loyalty to their brands.
  3. The telecom service providers should give emphasis to sales promotion activities, by giving incentives like data bonus, reduce call rate, free calls, T-shirts, scholarships, free books, this would go a long way in retaining existing consumers and attract potential ones.

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