CONSUMER PERCEPTION OF SALES PROMOTION IN THE MARKETING OF TELECOMMUNICATION SERVICES IN NIGERIA

ABSTRACT

Promotions are very significant elements of marketing activities. All over the world, the large multinational corporations to medium and even small firms recognize that there is no best alternative than promotion to communicate with consumers and motivate them to purchase their products or services. The purpose of this study is to determine the Effect of sales promotion activities in the marketing of telecommunication services in Nigeria. In the present competitive world if any business organization has to survive it needs to keep an eye on various forces operating in the market. Moreover competitors constantly try to win over others, in this scenario, every business organization needs to monitor the changes taking place in the market so that they are not caught by competitors. This study investigates, measure, and evaluates the sales promotion activities of telecommunication services in Nigeria from the reflection light of customers’ perceptions through the distribution of adapted questionnaire to 400 consumers using random sampling technique. This study actually reveals the state of sales promotion activities and the customers’ perception on this perspective and whether the sales promotion activities, its standard and customer perceptions are able to increase market share in the industry. The study also focused to the extent that whether these sales promotion activities and the defined customer perception can create positive impact on customers mind and be able to create positive contribution on the building of brand image of the company. As sample, telecommunication consumers in Umuahia have been surveyed. The main purpose of this study is to investigate consumers’ perception of sales promotion activities in the marketing of Telecommunication services. The study found that among all the significant variables influencing consumers perception of sales promotion in the marketing of telecommunication services, Price as Value of award in Contest, as Premium, Rebate and Bonus was the most important among the respondents followed by service quality and service availability. The study shows that Service availability, Price, Service quality and Customer service in the administration of Contest, Premium, Rebate and Bonus significantly influence consumers’ perception in the marketing of telecommunication services. The most preferred consumers’ telecommunication service provider is MTN, GLO and AIRTEL. It was recommended that mobile operators should reduce their expenditure on promotional activities and brand building but rather invest on network extensions, quality service delivery and product and services outlets infrastructural development, while also concentrating on price reduction strategies as a way of increasing subscribers’ base.

TABLE OF CONTENTS

Cover Page…………………………………………………………………………………........vi Declaration………………………………………………………………………………..…….vi

Certification………………………………………………………………………………………vi

Dedication………………………………………………………………………………….......... vi

Acknowledgements……………………………………………………………………………..vi

Table of Contents……………………………………………………………………………...….vi

List of Tables…………………………………………………………………………………. vix

Abstract………………………………………………………………………………………….. vi

Chapter One: Introduction

1.1Background of the Study………………………………………………………………………1

1.2 Statement of the Problem……………………………………………………………………...3

1.3 Research Objectives…………………………………………………………………………...4

1.4 Research Questions……………………………………………………………………………4

1.5 Research Hypotheses…………………………………………………………………...……..5

1.6 Significance of the Study……………………………….……………………………………..5

1.7 Scope of the study………………………………………………………………………….….6

1.8 Limitations of the Study…………………………………………………………………….…7

Chapter Two: Review of Related Literature

2.1Meaning of Marketing……………………………………………….………………….……..8

2.2 Concept of Consumer and Perception……………………………………….………………...9

2.2.1Introduction to Perception……………………………………………………………………9

2.2.2The Perception Process………………………………………………………………………9

2.2.3 Perceptual Mapping………………………………………………………………….…….11

2.3 Various Definition of Promotion…………………………………………………………….11

2.4 Promotional Strategy………………………………………………………………………...12

2.5 Sales Promotion …...………………………………………………………………………...13

2.6 Objectives of Sales Promotion………………………………………………………..……..15

2.7 Techniques of Sales Promotion…………………………………………………...…………15

2.8 Characteristics of sales promotion…………………………………………………………...17

2.9 Measuring the effectiveness of sales promotion…….……………………………………….17

2.10 Sales promotion tools…………..…………………………………………………………...18

2.11 Advantages of sales promotion………………………………...…………………………...22

2.12 Problems of sales promotion………………………………………………………………..22

2.13 Sales promotion strategy and management………………………………………………...23

2.14 Factors to Be Considered In Selecting Appropriate Promotional Strategy………………...23

2.15 Methods of Setting Promotional Budget……………………………………………………24

2.16 Telecommunication Industry……………………………………………………………….26

2.17 Basic Elements in the Telecommunication Industry……………………………………….27

Chapter Three: Research Methodology

3.0 Preamble…………………………………………………………………………………..…28

3.1 Research Design………..…………………………………………………………………….28

3.2 Study Area…………………………………………………………………………………...28

3.3 Sources of Data………………………………………………………………………………28

3.4 Population of the Study……..……………………………………………………………….29

3.5 Sample Design……………………………………………………………………………….29

3.5.1 Sample Size Determination………………………………………………………………..29

3.5.2 Sample Procedure or Technique…………………………………………………………...30

3.5.3 Instruments for Data Collection and Method of Investigation……………………………30

3.6 Data analysis techniques……………………………………………………………………...31

Chapter Four: Data Presentation and Analysis

4.1 Preamble.………………………………………………………………………………….....33

4.2 Data presentation……………………………………………………………………..33

4.2.1 Demographic and background characteristics of respondents…...………………………...33

4.3 Test of hypotheses……………………………………………………………………………40

Chapter Five: Summary, Conclusion and Recommendation

5.1 Summary of findings…………………………………………………………………………47

5.2 Conclusion…………………………………………………………………………………...48

5.3 Recommendations……………………………………………………………………………49

5.4 Suggestions for future research………………………………………………………………50

References

Appendix 1

Appendix 2

LIST OF TABLES

Table 4.1 Gender of respondents………………………………………………………..……...33

Table 4.2 Age of respondents……………………………………………………………….…..34

Table 4.3 Educational qualification of respondents…………………………………………….34

Table 4.4 Marital status of respondents………………………………………………………..35

Table 4.5 Employment status of respondents…………………………………………………..35

Table 4.6 Rate of subscription of respondents………………………………….……………...35

Table 4.7 Respondents choice of mobile telecommunication service provider..……………….36

Table 4.8 Factors that influence brand selection by respondents……………………..….……..36

Table 4.9 Effect of sales promotion on patronage…………………………..…………………..37

Table 4.10 Effect of sales promotion on choice……………………..…………………………..37

Table 4.11 Effect of sales promotion on response……………………………………………….38

Table 4.12 Promotional activities attract patronage……………………………………………..38

Table 4.13 Most preferred sales promotion tool…………………………………….…………..39

Table 4.14 Sales promotion tool effect on choice……………………………………………….39

Table 4.15 Consumers’ perception about sales promotion tool that can influence patronage of telecommunication service provider…………………………………………………………….40

Table 4.16 Consumers’ perception about premium as it influences choice of telecommunication service provider………………………………………………………………………………….41

Table 4.17 Model Summary of Regression Analysis …….……………..………………..……..42

Table 4.18 Analysis of Variance between Mobile Telecommunication Service Provider and Rebate …………………………………………….………………………………………….…42

Table 4.19 Regression Coefficient of the Relationship between the Choice of Telecommunication Service Provider and rebate……………….……………….………………43

Table 4.20 Model Summary of Regression Analysis ………………………..……….….…..….44

Table 4.22 Regression Coefficient of the Relationship between Telecommunication Service Provider and granting of bonus……………………..……………………..……………..……45

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Promotion happens to be one of the components of marketing mix. It constitutes the elements which are advertising, personal selling, sales promotion, publicity and public relations, through which marketers can communicate with the market. Promotion, according to Kotler (2000) is “the various activities which a company undertakes to communicate its product’s merit and to persuade target customers to buy them”. Every product needs to be promoted, that is to say, the attention of the public needs be drawn to the product and it’s identified benefits with the aim of bringing existing and potential customers from a state of the unknown to a state of actively adopting the organization’s product and service offerings, which involves stimulating activities embarked upon by marketers with a view to creating interest of buyers to their product and thus resulting in buying actions, Bashar (1997).

In Nigeria today, the telecommunication sector is highly competitive and telecommunication operators attempt to work hard to satisfy existing customers and win new ones through various promotional strategies, Oyeniyi (2011). The state of satisfaction of a customer depends on a number of both psychological and physical variables, which correlate with satisfaction behaviors and by communicating values and innovative services of the company Baron, et al (1986). The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization’s product.

Nigeria is currently the leading telecom market in Africa, with active subscribers of 142,589,775 out of 186,410,917 connected lines by the end of February, 2015 NCC (2015). This represents a teledensity of 101.85% up from a teledensity of 0.73% in 2001. Given this growth rate, there are huge market potentials for the industry, hence the intense competition among service providers to sustain and/or at least increase their customer base. At the moment, telecommunication service provision in Nigeria is currently shared among four major companies which include; MTN, GLOBACOM, AIRTEL and ETISALAT who have developed several methods including “price war” which have led to series of drops in mobile phone installation fees, call rates and free Short Message Services (SMS).

The cost of SIM card as at the time of inception in 2001 which was above N40, 000 is now N100 and even free in some instances, other results of the high competition include wide range of improved quality services available with efficient, cost effective and competitive services unlike when there is little or no competition, NCC (2012).

In order to retain consumers in the face of keen competition service providers must develop promotional strategies that will not only persuade and win customers but also help to inform and retain them. Promotion plays an important role in this regard by helping to retain old customers and at the same time attract new ones.

It is against this background that this study is considered necessary as its outcome will provide adequate understanding on the perception of consumers of the sales promotion activities in the marketing of telecommunication services in Nigeria and to achieve this, the study will be carried out in Umuahia, Abia state.

1.2 Statement of the Problem

The liberalization of the Nigerian telecommunication sector and the attendant benefits has made Nigerian mobile users to appreciate more the importance of telephone, especially mobile telephony. Users have become more sensitive to the characteristics and attributes of mobile operators. On the other hand, the mobile operators are equally concerned about changes in consumers’ behaviour in response to its service offerings.   Hence any development in the telecommunication sector is of great concern to the mobile users and the mobile operators.

However,  consumers  would  most  likely  behave   differently toward  the  various  mobile  operators’  products  and  services, hence,   achieving   optimum   consumers’   satisfaction   is   of paramount interest to the  mobile service providers. Evaluating the perception of mobile users in a highly competitive telecommunication market is very crucial. According to Hennig- Thurau et al, (2007) satisfaction of customers with products and services of a company are considered the most important factor leading toward competitiveness and success.

A study by Amusa, (2005) on “Consumer Behaviour in the GSM market” using University of Ibadan and the Polytechnic as a case study, examined the factors affecting consumer behaviour in the GSM market and the factors that account for the demand and use of GSM facilities.   In another study by Ojo, (2005) which considered “Consumer Satisfaction in the GSM Industry in Nigeria and the various constraints against users satisfaction”.  Olatokun and Bodunwa (2006), in a related study, carried out a survey on GSM uses and benefits in University of Ibadan.

In spite of all these studies, there has been no detailed one carried out yet to assess the influence of the attributes of the mobile operators on users’ choice of mobile service operators in the life of the Nigerian mobile users. The focal point of this study is to understand the consumers’ perception of sales promotion activities in the marketing of telecommunication service in Nigeria.

1.3 Research Objectives

The general objective of this study is to ascertain consumer’s perception of sales promotion activities in the marketing of telecommunication services in Nigeria.

The specific objectives of this study are to:

i. Ascertain the effect that Contest has in consumer perception in the marketing of telecommunication services.

ii. Measure the effect of Premium on consumer perception in the marketing of telecommunication services.

iii. Ascertain the effect of Price Rebate on consumer perception in the marketing of telecommunication services.

iv. Determine the effect of Bonus on consumer perception in the marketing of telecommunication services.

1.4 Research Questions

To ensure proper and logical solutions to the problems of this study and achieve the objectives, the work is guided by the following questions;

i. Does Contest influence consumer perception in the marketing of telecommunication services?

ii. To what extent does granting of Premium influence consumer perception in the marketing of telecommunication services?

iii. Does Price Rebate affect consumer perception in the marketing of telecommunication services?

iv. How does granting of Bonus on patronage influence consumer perception in the marketing of telecommunication services?

1.5 Research Hypotheses

To assist in achieving meaningful results, the following hypotheses were formulated;

H0₁: Contest does not have significant effect on consumer perception in the marketing of telecommunication services.

H0₂: Consumer perception of premium does not have any significant effect in the marketing of telecommunication services.

H0₃: Rebate has no significant effect on consumer perception in the marketing of telecommunication services.

H0₄: Granting of bonus does not significantly influence consumer perception in the marketing of telecommunication services.

1.6 Significance of Study

This study is to assess from the consumers’ perspective the level at which sales promotion activities affect the choice and patronage of telecommunication service. Therefore this study will be of great benefit to these telecommunication service providers, in that, it will inform them more about the reaction of their consumers towards the promotional strategies used at one point or the other in the industry so as to enable them use the right promotional method and media to get to their target audience at the appropriate time.

This study will also serve as an eye opener to the consumers of telecommunication service as they will be able to identify and appreciate various promotional activities carried out by telecommunication service providers and also know their importance in ensuring continuous increase or sustenance of market share for the industry.

Finally this study will help the researcher and students as it will serve as a guide for further research on this topic and other related ones.

1.7 Scope of the study

This study is subjected around the basic framework of telecommunication services in Nigeria and consumers’ perception of the sales promotion activities in its marketing. Therefore this study focused on the four major telecommunication service providers in Nigeria which are MTN, GLOBACOM, AIRTEL and ETISALAT.

These service providers were selected for the fact that they are the most consumed brands of telecommunication services in Umuahia.

1.8 Limitations of the Study

During this study a lot of obstacles where encountered and they include;

i. Lack of cooperation of most library staff and other offices where materials are to be sourced from.

ii. The work was strenuous as it is combined with other academic work.

iii. Difficulty in getting materials needed for the research work.

iv. Financial constraint which is as a result of high cost of transportation to areas where data will be gathered and also paid for.

v. Great energy and time was employed to be able to convince respondents that their response to the questions in the questionnaire will be treated with great confidentiality and are needed purely for academic purpose.

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