EFFECT OF SALES PROMOTION ON CUSTOMER PATRONAGE OF TELECOM SERVICES (A STUDY OF GLOBACOM NIGERIA LIMITED)

ABSTRACT

The aim of this research project was to appraise the effects of sales promotion on customer patronage telecommunication services. This was done under the following specific objectives: assess if it is justified to spend large sum of money on sales promotion; examine the effects of sales promotion on customer patronage with respect to the product of Globalcom Nigeria Limited; determine the level of awareness of customers towards the company product or services; and make recommendations to Global Nigeria Limited for future sales promotional activities. Two hypotheses were tested. In the research methodology, the random sampling techniques were employed in gathering of data. Using Taro Yamani’s formula sample size of thirty-six (36) of Globalcom staff were drawn and using purposive sampling, seventy four (74) customers/ consumers/ subscribers and retailers from company’s sales territory. Finally, the chi square statistical techniques were used for the data analysis. Based on the research it was concluded that sales promotion is not a wasteful venture rather sales promotion has a high impact on the customer patronage, and that this impact has a significant effect turnover, as it positively influences the company’s profitability. It was recommended among others that for effective development of the sales promotion programme, the management needs to determine the size of the incentive, the conditions for participation, the duration of the programme, the distribution channel suitable for the particular programme and then it must establish timing for the promotion.

TABLE OF CONTENTS

Title Page i

Declaration ii

Certification , iii

Dedication iv

Acknowledgement v

Table of Content vi

Abstract x

CHAPTER ONE

1.0 INTRODUCTION 1

1.1 Background of the Study 1

1.2 Statement of the Problems 3

1.3 Research Questions 4

1.4 Objectives of the Study 4

1.5 Research Hypotheses 5

1.6 Significance of the Study 6

1.5 Limitations of the Study 6

CHAPTER TWO

2.0 LITERATURE REVIEW 9

2.1 Sales Promotion 9

2.2 Purpose of Sales Promotion 13

2.3 Effect of Sales Promotion on Customer Patronage 15

2.4 Types of sales Promotional Techniques 16

2.5 Developing the Sales Promotional Programme 19

2.6 Sales Promotional Planning and Strategy 21

2.7 The Problem Implementing Sales Promotional Programme 22

2.8 Historical Background of the Company Globacom

Nigeria Unlimited 23

CHAPTER THREE

3.0 RESEARCH METHODOLOGY 29

3.1 Research Design 29

3.3 Area of the Study 30

3.4 Population of the Study 31

3.5 Sample Size and Sampling Techniques 32

3.6 Data Collection Method 33

3.7 Data Analysis Technique 34

CHAPTER FOUR

4.0 RESULTS AND DISCUSSIONS 35

4.1 Analysis of Questionnaire 35

4.2 Employees Response to Effect of Sales Promotion 36

4.3 Customers Response to Effect of Sales Promotion 43

4.4 Hypothesis Testing 49

CHAPTER FIVE

5.0 SUMMARY OF FINDINGS, RECOMMENDATIONS AND CONCLUSION

5.1 Summary of Finding   53

5.2 Conclusion 54

5.3 Recommendation 54

References

Appendix

CHAPTER ONE

2.0 INTRODUCTION

1.1 Background of the Study

The major tasks of marketers are to produce the right goods, charge the correct price, gives the product exposure through distribution networks, and to induce the consumers to purchase the product. All these marketing skills will be a waste of effort if consumer fails to become aware of the existence of a product or services.

However, sales promotion is the array of method or techniques that marketers use to stimulate or improve immediate purchase. In most cases, sales promotion is used in conjunction with other promotional tools especially advertising and personal selling to achieve desire result. But unlike advertising and personal selling, sales promotion comprises a wide variety of technical promotional tools of short term incentives designed to stimulate a target market response.

In other words, sales promotional is one of the methods or ways by which information about a product or service is passed to potential consumers. Generally, sales promotion has two main objectives which could be categorize into broad objective and specific objectives. The broad objectives of any slaes promotion will include product exposure, attention acquisition and comprehension of sales promotion, attitude change and behavior whjile in a specific objective the target consumers are specified as well as the intended effect of the promotion upon the target market (Engel et al, 1973).

Furthermore, in whatever form sales promotion is carried out, it’s aimed at achieving the following;

i. Encourage customers to sample

ii. Encourage dealers to stock

iii. Combating competition

iv. Improving distribution

Sales promotion is either directed to traders or customers. According to Gilbert (2007) the following techniques or methods can be used in consumers’ promotion, premium offers, contest, coupon, special discount and free trials.

Finally, sales promotion has taken a strong position in marketing. This is as a result the increasing back log of products which manufactures cannot sell as a result of high cost charged and diminishing purchasing power of the consumers. Another major reason of an increase in the level of competition among manufacturers brought about the increased entrepreneurship. Sales promotion helps increasing sales volume.. it’s also contributes to the building of a product and company image and assists in determining correct price for it product or service. This is possible especially when a company is using promotional pricing.

1.2 Statement of the Problems

Globalcom Limited incurs or spends heavily in their quest to produce quality products or services. This is complemented by incurring or spending huge sum of money in their drive in making this brand.

Since its early years of establishment, the Globalcom Nigeria Limited, the producer of products and services which is to serve as a case study in this project, has engaged itself in various sales promotional activities to sell it’s various  products such as recharge card, sim card and phones etc resulting on the consumers wining of cash price/ bonanzas product like motorcars, motorcycles, television set, free trips abroad were offered to consumers.

This huge resources being spent on sales promotion however, does not seem to translate into high sales volume to the company. Is it because of inappropriate choice of the promotion tool being used? Are those issues relating to implication problem? These and other related problems are what this study seeks to address.

1.3 Research Questions

The researcher formulates and presents the following questions that yearning for answer as follows:

i. Is the large spending on sales promotion justified?

ii. What influence does sales promotion has on customer patronage of telecom services?

iii. How has sales promotion contribute to customers’ patronage with respect to the product of Globalcom Nigeria Limited?

iv. What is the level of awareness of consumers towards the company product or services?

v. Are there some possible recommendations to Globalcom Nigeria Limited for future sales promotional activities?

1.4 Objectives of the Study

The main objective of this study is to examine the impact of sales promotion on customer patronage of telecom services.

The study will be guided by the following specific objectives;

i. To assess whether or not the large spending on sales promotion is justified.

ii. To examine the effect of sales promotion on customer patronage with respect to the product of Globalcom Nigeria Limited.

iii. To determine the level of awareness of consumers towards the company product or services.

iv. To assess the effectiveness of sales promotion as a marketing management tool in the Globalcom Nigeria Limited.

v. To make possible recommendations for enhancement sales promotion.

1.5 Research Hypotheses

The following research hypotheses are herein presented for testing for the confirmation and actualization of research objectives.

H_0i: Sales promotion does not have significant effect on Globalcom turnover.

H_1i: Sales promotion has significant effect on Globalcom turnover.

H_0ii: There no relationship between sales promotion and costumers’ partronage.

 H_1ii: There is relationship between sales promotion and costumers’ partronage

1.6 Significance of the Study

This project work is expected to be of importance because it enables the management of the organization to know if the huge sum of money spent on sales promotion is justified. It is also of importance to the management of the organization because it sheds more light on the various methods and techniques of sales promotion to be use in specific situation.

The study is also expected to be of greater importance to future researchers who want to broaden the frontiers of know ledge.

1.5 Limitations of the Study

One of the constraints of this study is time. The time given for the starting and completion of this research work is not adequate. And also another constraint is finance. Lack of sufficient money could be allowed the researchers travel to other areas with view to obtaining information.

Lastly, there is also the rigor of getting sufficient information from organization with they believe that you would reveal their business secret to their competitors.

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