1.1 BACKGROUND TO THE STUDY
A key ingredient in marketing campaign is sales promotion. In every business, the need to promote product, service or idea cannot be over emphasized. The America 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 quality. From the above definition, the modern elements of sales promotion are not visible.
Effective sales promotion increases the basic value of a product for a limited time and directly stimulates consumers purchasing, selling effectiveness in time with the efforts of sales team. The level of brand competition today requires a very high use of sales promotion activities in the society. Activities of sales promotion is best described as a specific usually short term promotion that is over and above what one would normally provide to the customers. When used effectively it can help to move old stock, counter act competitor activity, merchandise new products encourage repeat buying and motivate your staff some common types of sales promotion are Discounts, samples, instant draws and assigned gifts premium gifts or product combinations, container premium amongst others.
The high patronage and usage in the telecommunication industry in Nigeria today cannot be over emphasized. As individuals, companies and group depend on these networks available for fast and easy communication and day to day transactions. The privatization policy has erupted a number of investors in the telecommunication industry. “The banking and finance sector is reaping the benefits of deregulation as the telecom sector is creating more opportunities for investment”. Nnama ( 1999, p.1) The deregulation of mobile phone market led to the introduction of global system for mobile communication: (GSM).
The network providers operating on the 900/1800 MH2 spectrum are MTN Nigeria, Airtel, Globacom and Etisalat. (Source) just like many other African countries the use of cell-phone have soared and have mostly replaced the unreliable services provided by the Nigeria Telecommunication Limited (NITEL). With the tight nature of competition in the telecom sector as a result of growth of technology and information, consumers preference keeps changing, because of the low switching cost in the market. Due to this increasing demand of consumers in the market, management of business organizations have to increase their resources with attention focused more attracting and retaining its customers (Koller 2003).
The ensure this is done, major telecommunication sectors have employed the use of sales promotion to the point that consumers keeps switching from one network to the other as a result of the incentives or extra value they get. Sales promotion includes communication activities that provide extra value or incentive to ultimate customers, wholesalers, retailers or other organizational customers; it also stimulates sales product trial. (Kotler and Keller 2006). Thus stimulating consumers’ attitude towards a positive world of selecting the messages and acting suit. According to Keller (2003) consumer buying behaviour is the process by which individual search for, select, purchase, use and disposes goods and service in satisfaction of their needs and wants. Despite the use of sales promotion tools by the telecom industries the final purchase and determinants of how effective a product is, is the final consumers. In line with the above this study seeks to look into how select telecom industry utilizes sales promotion and how it influences her market performance.
1.2. Statement of Problem
Organizational performance is measured by the output of a promotional strategy in relation to the output of the organizational aim or goal. Sales promotion is to ensure a consumer buys now, but does not guarantee brand loyalty; which makes it obvious that consumers have the liberty to run around brands and utilize products as it suits them during promos.
The Telecomm Industry: MTN, GLO, Etisalat and Airtel are lined with the objective of high performance and profit maximization as bedrock. This has made them engage a great height of aggressive sales promotion programme in other to fit into or better still, win the competition in the GSM market. Sales promo tools utilized ranges from free sim packs, raffle draws of various items (automobiles, TV sets, generators), free calls, who wants to be a millionaire, free airtime, excessive overload of data amongst others. These promotional strategies used can be termed as promotional war because they keep changing strategies week in week out as their competitors change. It’s in line with the above that this research seeks to examine the concept of sales promotion to know if it influences market performance. Thus this question comes to mind to what extents do the select telecomm companies utilize sales promotion and how does it influence her market performance?
1.3. Research Objectives
The objectives of the study are:
- Determine the extent to which the select telecommunications carry out sales promotions.
- Find out the sales promotions strategies adopted by the select telecommunications company.
- Ascertain the perception of the public of the sales promotion activities of the select telecommunications company.
- Find out the influence of the sales promotion activities of the telecommunications companies on the choice of mobile network
- Determine the influence of the sales promotion activities on the market performance of the select telecommunications companies
- Find out whether sales promotions has any influence on the on the financial performance of the select telecommunications companies
1.4. Research Question
In line with the research objectives, the following questions will serve as guide to the research work
- To what extent do the select telecommunication companies carry out sales promotion?
- What are the sales promotions strategies adopted by the telecommunications industry?
- What is the perception of the public on the sales promotion activities of the select telecommunications industries?
- What is the influence of the sales promotion activities of the telecommunications companies on the choice of mobile network?
- What influence does sales promotion activities have on the market performance of the select telecommunications companies?
- Do sales promotions have any influence on the financial performance of the select telecommunications companies?
1.5 Significance of the study
Sales promotion is a promotional strategy that helps in the purchase of products as at when the manufacturers want. Meaning with sales promotion you can help sell your goods and services when you decide. Its concerned with the purchase of time frame. A lot of companies, industries and organizations employ knowledgeable use of this tool and have outstanding output.
The telecomm companies are not left out of this wave as there is a strict competition amongst brands and customers alike. Sales promotion has over the years helped in speeding up the selling process and maximized sales volume amongst users. Thus this research work will be of great significance to the telecomm companies as they will be informed on the various strategy of sales promotion and how these strategies can be used to attain organizational performance as it pertains to her objectives. It will also enlighten them on the need to ensure the appropriate use of a particular strategy for a particular product.
The upcoming unselected telecomm sectors will have a lot to learn from this study as they will not follow the band wagon in the use sales promotion that will work against their organizational goals and objectives.
It will be of utmost relevance to future scholars and researchers both in mass communication and marketing. Other companies involved in the use of sales promotion will benefit from this research work as it will encourage the appropriate use to ensure performance.
1.6 Scope of the study
This research work will be limited to sales promotion activities of the select four major telecommunication Industries the influence in their market performance in Nigeria, with limitation to North central. The telecomm industries are MTN, GLO, ETISALAT and AIRTEL. These four were selected out of the rest because they are majorly used and have adequate coverage both in the urban and rural areas of the country thereby having greater patronage. They were also because of long existence in the telecomm industry.
1.7 Definition of Terms
The key terms that will be used here are defined thus
Sales promotion: This is an attraction to products and services that attracts consumers and induce sales.
Company: A company is an organization, association or collection of individuals engaged in business activities.
Telecommunication: This is the wireless network system that enables communication within a stipulated range of coverage.
Performance: This is the output of the telecomm companies as it regards their organizational goals.
MTN, GLO, ETISALAT and AIRTEL: The selected telecomm companies for this work.