CHAPTER ONE
INTRODUCTION
1.1 GENERAL
DESCRIPTION OF THE STUDY
A Marketing Promotional Strategy is saliently concerned
with the role be played by each of the promotional mix elements towards
effective and efficient dissemination of information potential customers and
clients. Promotion practices are essential especially under condition of
imperfect competition, noon-rational behaviours of customers and incomplete
market information.
Intensified competition among different insurance
companies may well inform the need for serious attention to promotion. The
emphasis to be placed on promotion has relevance for both products and services
marketing. The Insurance marketer needs to understand the environment in which
the function, and to look at the promotion mix elements those he uses and those
which he must adjust.
Promotion Strategy can therefore, be seen as the design
and management of a marketing subsystem for the purpose of informing and
persuading present and potential customers and clients.
A firm should coordinate all its promotional efforts as a
complete subsystem in the total marketing system. In economic terms, the basic
purpose of promotion is to change the location and shape of the demand curve
for a company's products, service or idea. Through promotion, a company
attempts to shift a product's demand curve to the right, and change the shape
of the curve. Through the use of promotion, a company hopes to increase a
products sales volume at any given price. It also hopes that promotion will
effect the demand elasticity for the product, that is, making the demand
elastic when the price decreases.
The basic purpose of promotion strategy is to let actual
and potential customers, clients know about the product/ service, i.e. to
disseminate relevant information. Nigerian corporate marketing managers should
determine what combinations of advertising, personal selling and other
promotional tools will be the most effective promotional strategy for their
companies. Four factors that should be taken into account in deciding on the
promotional mix.
·
The amount of money available
for promotion
·
The nature of the
market
·
The nature of the
product
·
The stage of the
products life cycle
The major purpose of promotion is to inform, persuade and
influence people including customers, clients and other relevant publics.
A marketing promotions strategy/policy prescribed the role
to be played by every means of disseminating information to consumers about a
particular product or service. The relevant aspects of formulating this
strategy include such topics as determining the information to be communicated
to consumers, clients, the budget for it, and the choice of means or tools for
disseminating information.
Meeting promotion is also salient in the strategy or
market segmentation. Promotion is used to inform market segments of the
availability of products or services produced for them to meet their precise
needs and wants. Good customer/company relations should be paramount in a
Nigerian product or service organization. Nigerian company employees should
develop a behaviour that is tolerant, patient, polite, honest and sincere in
all their dealings with customers and clients.
Promotional activities and decisions, other than
advertising activities and decisions, include special price reduction, free
offers, technical leaflets, exhibitions, seminars and conferences, press free
edition In appropriate media, planning the size, selecting the administrative methods to be used and nature of the sales
office staff, remittent, remuneration and training of the members of the sales
department and devising a suitable monitoring service and information system to
keep track of results versus plans.
1.2 STATEMENT OF PROBLEM
Nigerian business environment is full of uncertainties and
instability. Therefore, a Nigerian marketing manager must identify, understand
and utilize the major element of the business environment in strategic
marketing decisions. Generally, a Nigeria marketing manager operates within the
following business environments’ economic,
technological, legal restrictions, competitive, socio-cultural, political and operating
environment among others.
·
The economic environment
includes inflation rate, interest rate, exchange rate, income per capital, more
also as the world experience global economic crisis which is affecting many
industrial and organization and also budget constraints.
·
The socio-cultural
environmental factors are consumers' and clients' lifestyles, level of hygiene,
customs, beliefs, values, age, geographical distribution and literacy level of
consumers and clients.
·
The technological
components are company's technical facilities for the production and delivery
of goods and services.
·
The legal environment
includes the business laws operating in land and its compliance.
·
The political
environment refers to the type of government policies, philosophies, programmes
and priorities.
·
The competitive
environment refers to the alternative companies that could provide products or
service to satisfy specific market needs and wants.
·
In developing an
efficient and effective marketing strategy and policy, it is important for a
marketing management to study the elements of any business environment and this
must be subjected to SWOT.
1.3 AIM & OBJECTIVES OF THE STUDY
The aim and objectives of this research is to delve into
the study of promotional strategies as tool for improving marketing management
in Nigeria.
·
Distinguish marketing
of goods from marketing of services.
·
Examine how the
element of marketing mix called "promotion" relates to marketing as
Insurance policies services in Nigeria, e.g. advertising, sales promotion and
personal selling.
·
Provide a general view
on Insurance products and examine the risk characteristics that can be the
result of lack of promotion, in the face of intense competition and the
provision of services that are generally identical in nature.
·
Present the
theoretical explanations for promotion of services and obtain a theoretical
conclusion on the benefits of marketing.
1.4 SIGNIFICANCE OF THE STUDY
The need for embarking on this project work cannot be over
emphasized.
Organization will benefit as involved in the policy
formulation and implementation of development and utilization of promotional
resources to achieve organizational goals. This work will be an attempt to improve
their productivity, increase profit and improve market share
as a result of promotional effort.
It will also go a long way in helping future researchers
and students alike who might be interested in studying prospects and problems
of lack of promotion.
1.5 RESEARCH HYPOTHESES
The following hypotheses will be tested:
H0: There is no positive
relationship between promotional activities and increase in market sales.
Hi: There is a positive relationship between
promotional activities and increase in market sales.
H0: Promotional strategies is not a
potent tool for achieving growth.
Hi: Promotional strategies is a potent tool for
achieving growth.
1.6 RESEARCH QUESTIONS
The research intends to answer or find solutions to the
following questions.
Does strategies Marketing Management lead to positive
development?
Can Promotional Strategies be a potent tool for improving
marketing?
Can Promotion enhance efficiency in the marketing
management in Nigeria?
1.7 SCOPE OF THE STUDY
In this study, attempt will be made to state the
promotional strategies as tool for improving marketing management in Nigeria.
The study will be carried out in Niger Insurance Plc from
July to December 2011 and all suggestions and recommendations will be advisably
relevant to the industry.
1.8 DEFINITION
OF TERMS
As the research progresses, many terms will be used which
the researcher find imperative to define to help simplify the research work and
prevent ambiguity in the course of study.
STRATEGIC
MANAGEMENT: According to Bowman
and Asch (2009), states that strategic management is the process of examining
both present and future environments, formulating the organization objectives,
implementing and controlling decisions and activities targeted of achieving
these objectives in the present and future environment. It is in essence, the
deployment of the firm's internal strength and weakness to exploit external
opportunities and minimize its external problems or threats.
STRATEGIC
MARKETING MANAGEMENT: It is that
segment of strategic management of an organization that focuses on the
marketing activities that have relevant bearings on both present and future
marketing operative of the firm. It is concerned with gaining competitive
advantage in marketing which is a continuing process.
MARKET
DRIVEN STRATEGY: According to Cravens
and Crittenden (2007), emphasize that market-driven strategy is to gain
competitive advantage by a firm which calls for analyzing and strategically responding to changing environmental
opportunities and threats. These strategies being with accurate understanding
of the market and focus on the customer is the basis for deciding how, when and
where to compete.
STRATEGY:
According to Chadlar (2007), it is the determination of
basic long-term objectives and goals of an organization, the adoption of
courses of action and the allocation of resources necessary to carry out these
goals and objectives.
PRODUCT
STRATEGY: A set strategy for new products,
product improvement and product deletion.
DISTRIBUTION
STRATEGY: This includes the strategy to be
used for each distribution channel, including role of middlemen assistance and
support provided and specific.
PRICE
STRATEGY: This specifies the role of price
in the marketing strategy and the planned actions regarding price.
MARKETING
RESEARCH: Identify information needs,
planned project objectives, estimated costs and timetable.
PROMOTIONAL STRATEGY: It indicates the planned strategic and actions for
advertising publicity, personal selling and sales promotions.
1.9 BRIEF HISTORICAL BACKGROUND
OF NIGER INSURANE PLC
Niger Insurance Plc was incorporated on the 29th
day of August, 1969 as a Private Limited Liability Company (The Niger Insurance
Company Limited) with an authorized share capital of N50,000 to take over the
undertakings, assets and liabilities of the Yorkshire Insurance Company
Limited, a fully owned British Company that had decided to stop transacting
Insurance business in Nigeria from 1969, sequel to the promulgation of the
Companies Decree of 1968, requiring all foreign companies in Nigeria to be
formally incorporated locally and be operated as such. This was the situation
up to December 1973 when Yorkshire Insurance Company Limited of England sold
its entire shareholding in the Niger Insurance Company Limited to National
Insurance Corporation of Nigeria. The result of the above transaction was that the
Niger Insurance became a wholly-owned subsidiary of National Insurance
Corporation of Nigeria.
The company is now a fully privatized composite Insurance
company quoted on the floor of the Nigerian Stock Exchange. Currently, Niger Insurance Plc is among the "BIG
FOUR" in terms of total gross premium income.
CAPITAL/ASSET BASE
The public quoted composite Insurance company presently
operates with an assets based in excess of N5 billion and a fully paid up authorized share
capital of N400 million.
MAN
POWER BASE
The management team of the company is made up of trained,
experienced and competent professionals with extensive management and technical
skills.
Niger Insurance Plc is fully computerized with the most
advanced software technology. The computer network is capable of expansion and
upgrading to meet with present and future increases in the volume of business.
Niger Insurance plc has also put in place sound
reinsurance treaties with local and foreign first class reinsurance companies
led by Swiss Re.
These comprehensive securities ensure financial stability
and exude confidence in its service to both present and prospective customers.
As a composite Insurance Company, Niger Insurance Plc
transacts all classes of Insurance business and offers a wide range of innovative and customer-oriented products
and services to its growing clientele.
At Niger Insurance Plc, they are very flexible in their product development because they realize
that no two customers are exactly the same.
Moreover, their products are backed up with one of the
most efficient and constantly improving claims settlement procedures in the
insurance market.
The following are broad spectrum of the products and
services the company is offering:
LIFE
AND PENSIONS
The company's commitment to rendering the best service in
this area of operation places its among the top three companies in the industry
with the largest life and pensions portfolio. These products which the company
has carefully packaged include:
·
Personal Pension and
Saving
·
Niger Cash Plan
·
Child Endowment Scheme
·
Deposit Administrative
Scheme etc.
GENERAL
BUSINESS
The policies relating to the above and designed to provide
indemnity against material and pecuniary losses arising out of various risks.
·
Motor
·
Money
·
Marine Cargo
·
Fire and Allied Perils
·
Burglary and Housing
Breaking etc.
SPECIAL
RISK AND MISCELLANEOUS INSURANCE BUSINESS
In this category, the company offers specialized policies
to cover losses from risks such as:
·
Bonds
·
Oil and Energy
·
Engineering
·
Aviation and Marine
Hull etc.
Niger Insurance Plc branch offices are manned by well trained and motivated personnel
nationwide but are coordinated from five Regional Offices.
·
Eastern Regional
Office, Port Harcourt
·
Lagos West Regional
Office
·
Abuja Regional Office
·
Kano Regional Office
·
Ibadan Regional Office
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