EFFECTS OF SALES PROMOTION ON CUSTOMERS’ BRAND LOYALTY OF GSM USERS IN UMUAHIA, ABIA STATE

ABSTRACT

The study examined the effect of sales promotion on customer brand loyalty among GSM users in Umuahia. The study examined the relationship between (free megabyte incentive, free air time/night call incentive and customer loyalty. Descriptive survey design was used. The data was obtained with the use of questionnaire as a result instructive. 309 questionnaire was distributed to respondent in Umuahia. The data was analyzed using multiple regression analysis with the aid of SPSS version 20. The study reveal that free megabyte, discount call incentive have significant effect in customer loyalty. It was recommended that GSM providers should focus attention on discount calls and NCC should ensure that GSM operator fulfill their sales promotion claims. 

TABLE OF CONTENTS

Title                                                                                                          Page

Title Page                                                                                                             i

Declaration                                                                                                          ii

Certification                                                                                                         iii

Dedication                                                                                                           iv

Acknowledgement                                                                                               v

Table of Contents                                                                                                 vi

List of Tables                                                                                                       ix

List of Figures                                                                                                      x

Abstract                                                                                                               xi

CHAPTER ONE

INTRODUCTION                                                                                              1

1.2      Statement of Problems                                                                                4       

1.3      Research Objectives                                                                                   5

1.4      Research Question                                                                                     5

1.5      Statement of Hypothesis                                                                             6

1.6      Significance of the Study                                                                            6

1.7      Scope of the Study                                                                                     7

1.8      Organization of Study                                                                                7

CHAPTER TWO

REVIEW OF RELATED LITERATURE                                                          8

2.1      Conceptual Framework                                                                              8

2.1.1   Sales Promotion Examined                                                                         10

2.1.2   History of Sales Promotion                                                                         11

2.1.3  Types of Sales Promotion                                                                           12

2.1.4   Objective of Sales Promotion                                                                     13

2.1.5   Sales   Promotion    Tools   and   Programme   of Companies                               16

2.1.6   Sales Promotion Strategies and Management                                               23

2.1.7   Planning and Designing the Sales Promotion Programme.                               23

2.1.8   Measuring the Effectiveness of Sales Promotion                                          27

2.2      Theoretical Framework                                                                              28

2.3      Empirical Framework                                                                                 33

CHAPTER THREE

RESEARCH METHODOLOGY

3.1      INTRODUCTION                                                                                    38

3.2      Research Design                                                                                        38

3.3      Study Area                                                                                                 38

3.4      Population of Study                                                                                    38

3.5      Sample Size Determination                                                                         39

3.6      Sampling Technique                                                                                   40

3.7      Instrument                                                                                                 40

3.8      Validity                                                                                                     40

3.9      Reliability Test                                                                                          40

3.10    Method of Data Analysis                                                                            42

CHAPTER FOUR

4.0      DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1      General Description                                                                                   42

4.2     Hypotheses Testing                                                                                  49

CHAPTER FIVE

5.0      SUMMARY, CONCLUSION AND RECOMMENDATIONS            52

5.1      Summary                                                                                                   52

5.2      Conclusion                                                                                                52

5.3      Recommendation                                                                                       52

References                                                                                                54

Appendix

CHAPTER ONE

INTRODUCTION

Telecommunication is growing rapidly since the deregulation of the sector on 2001. The telecom operator are trying their best to attract and return the customers through various marketing strategies. This is a vertical link between sales promotion and customer loyalty. A satisfied customer will keep on purchasing the products even on the normal price. Dodson and Taybout (2001) in Saeed, Nisar and Ahmed (2013) promotion acts V an external stimulus and there is less probability that the customers will repurchase the products after the campaign is over. Convincing customers and proselytizing them to switch to competitors requires strategic motivational incentives (Barriors and Lansangan, 2012) cited by Okolo, Agu, Obikeze and Ugonna, 2015). In their opinion organization have to all of huge amount to engage promotional strategies that will make them identify and remain loyal to a given brand having been acquainted with the knowledge that customers are getting more and more advanced and sophisticated in their approach to marketing realities. In order to retain customers; telecommunication firms must develop marketing strategies that will not only win the customer but also retain them. Sales promotion is regarded as the marketing strategy or technique that will help promote sales, increase profit, market share, product life cycle and enhance customers’ goodwill. Sales promotion activities has been identified as a marketing tools adopted to attract the attention of customer and build their loyalty in a product. It is seen as a means used by firms to communicate with intended target audience. Sales promotion refers to those promotional activities other than advertising, publicity and personal selling that stimulate interest, trial or purchase by final customers or others in the channel (Pillai, 2007 cited by Abiola and Samson, 2015).

Sales promotion is seen today as an enterprise marketing tools adopted by firms to facilitate sales, usage or trail of a product or services to creates awareness sales promotion provides extra-incentive for the target audience to make purchases or support one brand over another thereby serving as a competitive weapon. Hence, it increases market share (Abiola and Samson, 2015) sales promotion as marketing incentives and inducements offered a target market has the potency of spurring up efficiency along the channel of product distribution based on staff force motivation for ultimate objective of turnover enhancement based on increase in product demand (Oko, 2002 and Oko, 2014); therefore it is targeted at the members of corporate sales force (personnel), members of the marketing intermediaries and the ultimate consumers. Organization adopt the tools of sales promotion as an aid to building brand loyalty, given its ability to attract loyal and profitable customers and to protect the vendor from competitions especially as it grants the vendor greater control in the planning and blending of the marketing mix elements (Shira 2009 and Oko, 2014) firms adopt sales promotion tool as weapon of warfare for securing and enhancing marketing share, given the degree of market competition Odunalami And Ogunsiji, 2011), hence it is cast involving in terms of planning and execution (Preko, 2012, Oko and Nnanna, 2014). The important issues in sales promotion are the generation of turnover, stock file, disconnection (elimination), enhancement of vendor’s image and the action of price image (high – low). Vyas, 2007, Oko and Nnanna, 2014).

In the Nigeria telecommunication service market, like in most other sectors, sale promotion aids the vendor manage the perceived financial, social and psychological risks associated with product consumption, (Oko, 2013, Oko and Etuk 2012, Oko and Egwu, 2014 and Oko and Nnenna, 2014) as consumers develop confidence in the offer, as acquired from accredited vendors product usage confirming to the societal norms and are within the technological awareness and acceptance level of the society and as accepted brand are offered for sale during a defined sales promotion marketing period.

Again, the Nigeria telecommunication sector is highly competitive and the operators attempt to appeal and win customers through various sales promotion strategies. The Nigeria telecommunication industry is entering its maturity phase, with reducing average profits with fierce competitive telecom operators must work hard to reduce cost, win new customers and return existing ones and increase profit to ensure sustainable development of their business (Oyeniyi Omotayo, 2011). The telecommunication sector is the most developing industrial sector in Nigeria since its deregulation in 2001. The deregulation commenced with the granting of license to three companies to provide wireless telecommunication services using the global system for mobile (GSM) platform. They are the Mobile Telecommunications Networks (MTN), Mobile Telecommunication Service (Mitel) and Econet wireless Nigeria now Airtel. There were 127, 10 million active lines for the three industry operators as at March 2014, (NCC Report 2014) which is divided as follows: Mobile GSM – 124.88m (98.5%), mobile (DMA – 2.04m (1.60%) and fixed wireless 0.11m (0.13%). Presently, four national GSM carriers MTN, Globacom (Glo), Airtel and Etisalate) and other secondary CDMA operators render telecommunications services in Nigeria, these GSM providers are competing for all the GSM customers/subscribers in the country since inception in 2001 (Aghara, 2005).

Many academic work or research have been done on the telecommunication industry as it affects the Nigeria consumer. Some of the studies includes effects of customer loyalty strategies on customer satisfaction among GSM services providers in South South Nigeria sales promotion in the marketing of telecommunication service in Nigeria: impact analysis most of the study may not be very reflective of consumers in South East region, this study bridge the gap.

1.2      Statement of Problems

The Nigeria telecommunication sector is highly competitive and has allowed competing telecommunication firm since the inception in 2002. (MTN, AIRTEL, GLO and ETISALT). The customers of these GSM firms have various choices to make and this competition tends to enhance efficiency to a large extent. Sales promotion strategy is seen as a tool used widely by competing telecommunication players in Nigeria (Omotayo, 2011).

As rightly observed by Okolo, Agu, Obikeze and Ugonna (2015) the Nigeria GSM service subscribers are tired of complaining about network failures, cross lines, drop calls, poor internet connectivity, high call tariffs and general poor customer care service. These are complaints that tend to make a customer frequent stricting from one GSM firm to the other in search of satisfaction. However, improving customer satisfaction through sales promotional activities by telecommunication industry can lead to customer loyalty.

1.3      Research Objectives

The main objective of this research is to evaluate the effect of sales promotion in customer loyalty. The specific objectives includes:-

1.       To ascertain the various consumer sales promotion incentives by telecommunication firm.  

2.       To examine the influence of free air time/night calls incentive on customer loyalty.

3.       To examine the influence of free megabytes incentive on customer loyalty.

4.       To examine the influence of discount calls incentive on customer loyalty.

5.       To examine the influence of free sms/mms incentive on customer loyalty.

1.4      Research Question

In line with the research objectives, the following research questions will guide this study.

1.       What are the various sales promotional incentives adopted by telecommunication firms?

2.       To what extent does free air/night call influence customer loyalty?

3.       To what level of influence does free megabyte have on customer loyalty?

4.       To what extent does discount calls influences customer loyalty?

5.       To what extent does free sms/mms influences customer loyalty?

1.5      Statement of Hypothesis

          The following hypothesis will provide direction for the study.

Ho₁:   Free airtime/night calls will not significantly influence customer loyalty.

Ho₂:   Free megabyte will not significantly influence customer loyalty.

Ho₃:   Discount calls will not significantly influence customer loyalty.

Ho₄:   Free sms/mms will not significantly influence customer loyalty.

1.6      Significance of the Study  

The main thrust of the study is to investigate the effect of sales promotion on customer loyalty in telecommunication industry. This research when completed will be befitted to the following:

Telecommunication Organization: The study will immensely help the service providers to better understand how the variable free airtime/night calls, free megabytes, discount call, free sms/mms will influence brand loyalty. This will enable the service providers adjust their offerings to suit these consumer requirements.

The Regulatory Body NCC: The body will equally benefit immensely from the findings of this study. Their regulatory/supervisory role and policy making direction will be further enhanced, by ensuring that the providers comply with all critical/technical requirements that will guarantee safe and efficient service delivery to the consumers.

Academic Community: The research will add to the body of knowledge in the GSM telecommunication industry, which has attracted many scholarly papers since the deregulation of the sector in 2001. It will be a reference materials for scholars, teachers, researchers for further research, based on finding.

1.7      Scope of the Study

This study is in the effect of sales promotion on customer loyalty. The subject scope is marketing communication and consumer behavior. The geographical scope is GSM users in Abia State, finally the coverage spouse is made up of MTN and Glo users in Abia State.

1.8      Organization of Study

The research is organized in chapters. Chapter one contains the introduction, problems statement, objectives, significance of the study, limitation and hypothesis.

Chapter Two will review some related literature, theoretical review, empirical review and conceptual framework.

Chapter three deals with research methodology, research design, instruments for data collection, method of data collection and analysis.

Chapter four deals with presentation and analyzed data collected using tables, percentages.

Finally, chapter five summarizes the study at large, makes conclusion, as well as useful recommendations.     

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