EVALUATING THE IMPACT OF SALES PROMOTION ON THE MARKETING OF GLOBAL SYSTEM FOR MOBILE TELECOMMUNICATION (GSM), SERVICES IN ENUGU METROPOLIS.
This research work was to evaluate the impact of soles promotion on the marketing of Global system for Mobile Telecommunication (GSM) services in Enugu Metropolis; a case study of MTN. Organizations, including MTN, generally spend huge sums of money on sales promotion. Then, of what positive impact or otherwise does sales promotion have on the company’s product awareness; customers patronage and on its profit. The population of the study was drawn from MTN staff, dealers, consumers and Topmans formula was used to determine the sample size. Questionnaire was used to collect data, analysed and chi-square statistics was used to test the formulated hypothesis. The major findings of the study revealed that: - sales promotion increases consumer’s awareness, increases consumers’ patronage, it, among other things leads to increased profit of MTN. That the most important factor in choosing a GSM operator and not necessarily sales promotion. Based on the above, the following recommendations are made; that MTN should improve the quality of its services – as that is the prior factor considered by consumers in choosing a particular GSM operator. MTN should be more tactical in promoting its prepared package – PAY AS YOU Go to avoid making it inferior in the eyes of consumers in the long run, etc. Hence the researcher have great faith that if the recommendations are judiciously executed, monitored, MTN sales promotion campaigns would be more effective and profitable.
1.1 BACKGROUND OF THE STUDY
The essence of marketing is to use product (goods and services) to satisfy human needs and wants. Marketing therefore, is human activity aimed at satisfying needs and wants through exchange process as efficie0ntly and as effectively as possible.
However, no matter how a product completely meets the requirements of the consumer, the marketer has to make use of the marketing communication mix marketing communication variable, and sales promotion is one of these variables.
Sales promotion is concerned with that something extra or incentive or any promotional activities other than advertising, public relations, direct marketing, personal selling which is aimed at stimulating short-term buying action. Sales promotion activities are directed to consumers middlemen or the firms own sales force. The sales promotools are grouped under the following categories:
a. CONSUMER PROMOTION: (Samples money refunds, premiums, coupons, price-offs, etc).
b. TRADE OR DEALER PROMOTION: Those directed towards middlemen (buying allowance, free goods, dealer sales contest, cooperative advertising, etc).
c. SALES FORCE PROMOTION: - Those directed towards sales force (sales meeting, sales contest, special bonus, etc).
The short-term sales promotional incentive is aimed at moving sales of a particular product above the existing level. Sales will increase if more customers are attracted to the shop, if non-brand users are attracted and if brand users are encouraged to buy more. Consumer promotions essentially attracts the more price conscious or premium conscious buyers. The impact varies with the types of promotion, the size of the incentives, the ease of getting thr offer, and the amount of awareness created for the offer. It is generally considered that the sales promotional activities are designed to break down brand loyalty. This is because sales promotion benefits are immediate, but it does not build any consumers franchise. They attract mainly the deal prone consumers who are always willing to switch brands as incentives become available. Sales promotion device are usually the only promotional material available at the point of purchase. This contributes to its impact in stimulating the prospect. The prospects are often in a buying frame of mind or they would not be there at the point of sale.
Thus, sales promotion objectives vary with the type of target market.
CONSUMER SALES PROMOTION OBJECTIVE
It include increasing buying response by encouraging.
(a) “shop and buy” – This is to build trials among non-users and to create in the consumers the desire to purchase.
(b) “Buy Bigger” – including more usage and purchase of larger quantity.
(c) “Repeat purchase” – Persuading consumers to return again and again.
FOR RETAILERS: OBJECTIVES INCLUDE
Increasing selling efforts and intensity by encouraging.
(a) More allocation of shelf space and large stocking of the firms merchandise in the hands of the resellers, retailers, and wholesalers, etc.
FOR SALES FORCE: OBJECTIVES INCLUDE
Increasing selling efforts by encouraging
(a) call on more accounts or prospects
(b) stimulating sales in off-seasons. There by encouraging customers to be too sensitive to price premium changes.
In view of the above factors, on the emergence of Global system for Mobile Telecommunication (GSM) services in Nigeria on August 2001, the operators relied so much on this very important marketing communication tool – sales promotion to attract buyers, penetrate the Nigerian market, generate customers and provide better value. That is, different sales promotools were used in penetrating the Nigerian market. Some targeted at consumers and others on the dealers. Money refunds, price-offs, contest and free goods, have at different times been given to the consumers while free merchandise allowances, etc were given to dealers. The pertinent question, hence is “of what impact has the sales promotion had on the company’s sales? Does the game worth the candle (essence) or has it been an exercise in futility (wasted effort and money).
Therefore, this research work is poised to answer this important question with special consideration on Mobile Telephone Networks (MTN), Communication Nigeria Limited, a part of MTN Group, Africa’s leading Mobile Telephone company.
MTN, was incorporated in Nigeria on November 8, 2000 as a private company with 74.6% ownership by Mobile Telephone Networks International Limited, while 22.4% by indigenous shareholders. On February 9, 2001. The Nigerian Communications Commission granted MTN license to operate digital (Global system for Mobile Telecommunication, GSM) telephone. In the new dispensation, MTN, became the first to make call on its GSM network on May 16, 2001. Afterwhich, it launched full commercial operations on August 8, 2001.
Thus, the company has undertaken a lot of sales promotion programmes since its commencements of commercial operation in Enugu and other major cities in Nigeria. The first was BOGOF – buy one get one free, this gave MTN consumers the opportunity of getting one free handset and sim pack with each handset bought. Also discount was given to customers who bought specified handsets and line. Equally, during festive periods – Ide-Mahid, Christmas, Independence Day, etc different forms of sales promotion targeted basically on the consumers are held. It is on record that on February 10, 2003, MTN had one of its biggest promotion – the company had one million subscribers and rolled out “MTN one millionth subscriber promo”, the star winner was an Asata subscriber, who smiled and went home with one million naira. MTN, had also apart of its major product such as pay as you go (the prepaid packaged) business time (post paid or contract packaged), booster card, as well as an array of value added service that includes short message service, SMS, international roaming, wireless application protocol (WAP), MTN fun tones, MTN directory enquiries and remote interactive voice response (RIVI), launched MTN PROTIME, which offers lower tariff (N15 per minute peak period as against N25 per minute being offered to other subscribers. Also, the company offers gift to its customers ranging from its caps, branded polo to sport kits. And dealers are given merchandise allowance on the handset, sim pack and recharged cards.
Hence, evaluating the impact of this promotion is therefore a no small taste that will be handled with all commitment.
1.2 STATEMENT OF PROBLEM
The problems of the study include: -
1. The effect of sales promotion on the company (MTN) sales.
2. The issue of whether sales promotion really make Nigeria (Enugu) consumers buy the company products.
3. Finding out the issue of why companies (MTN) carry out sales promotion.
4. The issue of people (customers) subscribing to one network (GSM network) as against another.
1.3 OBJECTIVE OF THE STUDY
The main objective of this research work include: -
1. To evaluate the impart of sales promotion in the marketing of GSM services.
2. To know the extent MTN sales promotion programme affects consumers patronage.
3. To know the extent sales promotion contributes to MTN profit.
4. To make recommendations that will help the company to improve on its sales promotion effectiveness.
1.4 FORMULATION OF HYPOTHESES
The following hypotheses would be tested in this project:
1. HO sales promotion used by MTN does not create awareness for its services.
H1 sales promotion used by MTN creates awareness for its services.
2. HO sales promotion used by MTN does not increase consumer’s patronage.
3. Ho sales promotion used by MTN does not increase its profit.
H1 sales promotion used by MTN increases its profit.
1.5 SIGNIFICANCE OF THE STUDY
It is my hope that this research work will provide relevant information to the management of MTN, its dealers, consumers and other professionals especially marketers – both potential and practicing. It will enable the management of MTN to know how effective its sale promotion tools have been and also know possible ways of improvement.
To MTN dealers – especially potential ones, they will be able to know and to a large extent too, the activities of the firm towards encouraging them (dealers promotion).
It will also be of immense help to all professionals, especially marketers who will like to study the influence of sales promotion on the purchasing habits of the consumers both in the telecommunication industries and any other industry.
More so, there has been an advanced knowledge on the study of consumer behaviour to the researcher.