CHAPETR ONE
INTRODUCTION
1.1 Background of the study
1.2 Statement of problem
1.3 Objective of the study
1.4 Research Hypotheses
1.5 Justification of the study
1.6 Significance of the study
1.7 Scope and limitation of the study
1.8 Definition of terms
1.9 Organization of the study
CHAPETR TWO
2.0 LITERATURE REVIEW
CHAPETR THREE
3.0 Research methodology
3.1 sources of data collection
3.3 Population of the study
3.4 Sampling and sampling distribution
3.5 Validation of research instrument
3.6 Method of data analysis
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS AND INTERPRETATION
4.1 Introductions
4.2 Data analysis
CHAPTER FIVE
5.1 Introduction
5.2 Summary
5.3 Conclusion
5.4 Recommendation
Appendix
Abstract
Customer satisfaction and loyalty have been identified as critical success factors in any business organization. Recent developments in the Nigerian telecommunications industry indicate that the operators engage in several marketing activities to ensure that their subscribers are satisfied and brand loyal. However, most subscribers complain about the quality of services and some switch from one operator to the other or use several lines. Consequently, this paper examined the marketing activities that influence customer satisfaction and the factors that determine customer loyalty in the industry. Based on a contemporary definition of marketing, five constructs (product, price, distribution, promotion and customer service) were identified and tested.
CHAPTER ONE
INTRODUCTION
- Background of the study
Every firm aims to make profit. It is generally agreed that one of the keys to making profit is boosting sales. To boost sales, a substantial number of customers must choose one’s product over and above that of its competitors on a substantial number of occasions. One of the surest way of ensuring this happens is to cultivate brand loyalty to one’s product or service.
Brand loyal consumers are more likely to choose their preferred products and /or service over its competitors on a consistent basis. Considering the fact that consumers tend to be finicky with their choices, producers of rival brands tend to be uncompromising with product or service quality while being relentless with their marketing, wiggle room for product in a highly competitive environment is little or nonexistent and the margin of error is narrow. Brand loyal consumers tend to serve as a crucial even if sometimes unconscious support base for product and/or service is the fierce battle for patronage.
For any organization therefore broadening and deepening the base of brand loyal consumers is a key objective in fashioning out any marketing strategy for the brand. Indeed, brand loyalty has been proclaimed by some as the ultimate goal of marketing (Reicheld and Sasser, 1990). Hence, this concern led to the study of sales promotion as it relates to customer loyalty. Sales promotion is inevitable for any type of organization that wants to stimulate sales. According to the American 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 product quality”. But this definition does not capture all the elements of modern sales promotion. Schoell and Guiltinan (1996) sees Sales promotion as any activity that offers an incentive for a limited period to induce a desired response for target customers, company sales people, or intermediaries.
Jobber (2004) simply captures sales promotion as a package of incentives to consumers or the trade that are designed to stimulate purchase. Sales promotion, a key ingredient in marketing campaigns, consists of a collection on incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers of the trade (Kotler and Keller, 2009). Sales promotion plays an important role in retaining old consumers and attracting new ones. It has being established in literature that only consumers with repeat purchases are profitable (Nagar, 2009). For any country to achieve national development, several aspects of the economy are expected to change positively. A strategic aspect of these expectations is the quality of services of the telecommunications industry (Bello-Iman and Obadan, 2004). The introduction of the Global System of Mobile communications (GSM) into the Nigerian market in August, 2001 brought amazing transformation to the telecommunications industry. It made telephone lines available to most Nigerians. Telephone lines increased from 656,461 in 2001 when GSM was introduced to 81,195,684 in 2010 (Onwuegbuchi, 2010). It has also enhanced the revenue base of government as well as generated employment opportunities in the country. The rationale and motivation for this study lies on the fact that despite these benefits, Magbagbeola (2004); CPC (2010) noted that the operations of GSM have been shrouded in controversy notwithstanding the fact that it has been of utmost benefit to consumers and the economy generally. GSM services have been criticized overtime for high tariffs, drop calls, acute network congestion, wrong billings, poor signals, call jamming, speech breakages, echoing of speech, delay or non-delivery of text messages after necessary charges have been deducted, inability to load recharge cards and general poor services (CPC, 2010). In July, 2007, the National Assembly summoned all GSM operators to give explanations for their inefficiency. A committee was also set up to investigate the inefficiency of GSM operators. They maintained that this became necessary due to public outcry on the epileptic services as well as its economic and social implications (Adegoke, Babolola and Balogun, 2008). NCC (2006) reported that the Nigerian GSM market is the fastest growing market in the world but at the same time, the industry has been lagging behind most other sectors in terms of customer satisfaction and loyalty. Aminu and Hartini (2008) observed that rapid diffusion of GSM services is accompanied by low satisfaction and high switching behaviour. Customer satisfaction is a fundamental goal of marketing as the purpose of marketing is to satisfy customers. According to Bloemer and Odekerken-Schroder (2002) customer satisfaction is the result of successful marketing that creates competitive value for consumers. Contemporary marketing efforts are geared towards meeting consumers’ needs and ensuring customer satisfaction and strategizing on how to retain such customers. Unfortunately, most marketing efforts focus on attracting new customers rather than retaining the existing ones (Hassan, 2008). A comprehensive definition of marketing was given by Bearden, Ingram and LaForge (2007). They defined marketing “as an organizational function and a set of processes for creating, pricing, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders”. This indicates that the objective of marketing is to deliver value (satisfaction) to customers as well as build a long-term and mutually profitable relationship with the customers. This can be achieved by a right combination of marketing variables that are under the control of the company. In today’s competitive market, customer loyalty has become a major concern of firms. Loyal customers not only increase the value of the firm but they also enable it to maintain costs lower than those associated with attracting new customers (Boora and Singh, 2011). The telecoms industry in Nigeria is highly competitive with several operators (MTN, Airtel, M-Tel, Glo Mobile, Etisalat, Visafone, Starcomms and Multi-links). In order to offer better services and gain competitive advantage, operators have to understand the antecedents of customer satisfaction and customer loyalty so as to provide better services to customers. Some studies (Cronin, Brady and Hult, 2000; Aminu and Hartini, 2008; Chang, Wang and Yang, 2009) have indicated that customer satisfaction determines customer loyalty while others (Jones and Farquhar, 2003; Irit and Barak, 2011) have shown that customer satisfaction is not sufficient for customer loyalty in some industries. On the basis of this argument, Boora and Singh (2011) called for further empirical research in different service settings on the relationship between customer loyalty and its antecedents. This shows that sales promotion is vital and research must be done to explore it full potential fully. Against the background, this research work strives to broaden our understanding as it appears that sales promotion has to be integrated in order to gain customers’ loyalty in the Nigeria telecommunication industry. In Nigeria, the telecommunication sector is highly competitive and telecommunication operators attempt to appeal and win customers through various sales promotion strategies. The Nigerian telecommunication industry is entering its maturity phase, with reducing average profit. With fierce competitive, telecommunication operators must work hard to reduce cost, win new customers and retain existing ones and increase profit to ensure sustainable development of their businesses.
- STATEMENT OF THE PROBLEM
Every supplier wants to create and retain a loyal customer who engages in continued profitable business with him. Customer loyalty is the measure of success of the supplier in retaining a long term relationship with the customer. Marketers across the globe have to use sales promotional resources available to them efficiently and not to waste them under any circumstances. Worldwide survey indicates that consumers globally are changing their behavior towards product and services. Hence competitors seem to develop any available sales promotional strategy to retain existing customers. The challenges of sales promotion is that its activities are required to generate awareness about not only their presence but also accentuate the importance of the brand, constantly emphasizing on the brand, the purchase of which would bring a host of other benefits for customers who buy the brand. The brand should be strong enough and should have enough qualities to motivate the consumers to buy it again once the sales promotional activities has succeeded in enabling the customer to buy the brand. There is also a challenge of maintaining the market pressure of the brand. This happens through the constant emergence of new sales promotional activities for short time periods that main the freshness of the brand. A sales promotion makes up one of the seven part of promotional mix. One of the benefits organization would derive from good sales promotion is that it can create up sell or cross sell opportunities for a business. Up sell or cross sell opportunities can result in word-of-mouth business from satisfies customer. This will generate more profit which can also be considered another benefit. The sales promotion can also cause the company to focus on marketing and create creative tasks for the marketing team at the company.
- OBJECTIVE OF THE STUDY
The General objective of the study is to determine the impact of sales promotion on customers’ loyalty in the Nigerian Telecommunication Industry. Other specific objectives are:-
- To Determine the Impact of Premium Sales Promotion on Customer Patronage.
- To Examine the Role of Sales Promotion through Consumer Contest on Brand Switching.
- To Evaluate the Effectiveness of Sales Promotion on Customer Loyalty.
- RESEARCH QUESTIONS
Given the objective of the study above, the following research questions are thus formulated to guide the study:
- What impact does Premium Sales Promotion has on Consumer Patronage in the Telecommunication Industry.
- How can Sales Promotion through Consumer Contest Impact on
Brand Switching in the Telecommunication Industry.
- How does Sales Promotion Impact on Customer Loyalty in the Telecommunication Industry.
- RESEARCH HYPOTHESES
To aid the successful completion of the study, the following research hypotheses were formulated by the researcher;
H0: premium sales promotion does not have any significant impact on consumer’s patronage
H1: premium sales promotion does have a significant impact on consumer’s patronage
H02: there is no significant relationship between sales promotion and customer’s loyalty to a particular brand
H2: there is a significant relationship between sales promotion and customer’s loyalty to a particular brand
- SIGNIFICANCE OF THE STUDY
It is believed that at the completion of the study, the findings will be of great importance to the marketing managers of Telecommunication Company, as the literature reviewed and the findings of the study seek to explore and examine the relationship between sales promotion and customer loyalty, the study will also be beneficial to the users of the services of the telecommunication company as the study will serve as a source of information to them on the efficiency of services rendered by different telecommunication companies. The study will also be useful to researchers, who intend to embark on a study in a similar topic as the study will serve as a reference point. Finally, the study will be useful to academia’s, students, teachers lecturers and the general public as the study will add to the pool of existing literature and contribute to knowledge.
- SCOPE AND LIMITATION OF THE STUDY
The scope of the study covers the impact of sales promotion on customers loyalty in the Nigerian telecommunication sector. In the cause of the study, there were some factors which limited the scope of the study
- a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
- b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
- c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.
1.8 OPERATIONAL DEFINITION OF TERMS
Sales
Sales is activity related to selling or the amount of goods or services sold in a given time period.
Sales promotion
Sales promotion is one of the elements of the promotional mix. Sales promotion uses both media and non-media marketing communications for a pre-determined, limited time to increase consumer demand
Telecommunication
Telecommunication is the transmission of signs, signals, messages, words, writings, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems
Customer loyalty
Customer loyalty is the result of consistently positive emotional experience, physical attribute-based satisfaction and perceived value of an experience, which includes the product or services. Consider who you yourself are loyal to.
1.9 ORGANIZATION OF THE STUDY
This research work is organized in five chapters, for easy understanding, as follows
Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study.
