ABSTRACT
The ever increasing competition in the telecommunication industry has prompted telecom firms to be determined and ensure satisfaction of customer needs and wants more effectively than their competitors. In other for these telecom firms to succeed in this ever increasing competitive market, they employ a lot of different promotional tools to attract and retain their customers. One of the most commonly used promotional tools is sales promotion which provides incentives to customers or to the distributor channel to stimulate demand for a product. This study is aimed at assessing the role sales promotion play in influencing the consumer buying behaviour of telecom consumers. A non-probability sampling technique was used for the study and the sample was selected from a population of telecom service users resident in the Abuja. A five point Likert scale questionnaire was used in acquiring the respondent’s information. The questionnaires were analysed with the help of Statistical Package for Social Sciences (SPSS) and Microsoft Excel. The study indicated significant influence of sales promotion on consumer buying behaviour. The research consequently recommended that, telecom service providers need to undertake regularly sales promotion activities to ensure constant influence on their patrons.
CHAPTER ONE INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The business environment has become very competitive in the 21st century due to the growth in technology, infrastructure and access to information around the globe. This has made the environment very complex and consumer preferences keep 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 on attracting and retaining its customers.
The ever increasing competition in the global market has prompted organisations to be determined and ensure satisfaction of customer needs and wants more efficiently and effectively than ones competitors (Kotler, 1988). The Nigerian telecom industry is one area that has experienced an increased competition in the last six (6) years.
In the telecom industry where competition is intense, the criterion for success would much depend on creating awareness, persuasion and informing customers of the existence of offerings. Sales promotion is an initiative undertaken by organizations to promote and increase sales, usage or trial of a product or services (Aderemi, 2003). Sales promotion refers to the provision of incentives to customers or to the distribution channel to stimulate demand for a product. It is an important component of an organizations overall marketing strategy along with advertising, public relations and personal selling. Sales promotion acts as a competitive weapon by providing an extra incentive for the target audience to purchase or support one brand over the other. It is particularly effective in spurring product trials and unplanned purchases (Aderemi, 2003).
Sales promotion is a marketing activity that adds to the basic value proposition behind a product (i.e. getting more for less) for a limited time in order to stimulate consumer purchasing, selling effectiveness or the effort of the sales force (Aderemi, 2003). This implies that, sales promotion may be directed either at end consumer or at selling intermediaries such as retailers or sales crews.
Most marketers believe that a given product or service has an established perceived price or value, and they use sales promotion to change this price/ value relationship by increasing the value and /or lowering the price compared with other components of the marketing mix (Odunlami and Ogunsiji, 2011). In determining the relative importance to place sales promotion in the overall marketing mix, an organization should consider its marketing budget, the stage of the product in the life cycle, the nature of competition in the market, the target of the promotion and the nature of the product (Odunlami and Ogunsiji, 2011).
Sales promotion can be an effective tool in a highly competitive market, when the objective is to convince retailers to carry a new product or influence consumers to select it over those of competitors. More so, sales promotion tend to work best when it is applied to items whose features can be judged at the point of purchase, rather than more complex, expensive items that might require hands of demonstration (Kotler and Keller, 2006). Sales promotion includes communication activities that provide extra value or incentives to ultimate customers, wholesalers, retailers or other organizational customers. It also stimulates sales product trial (Kotler and Keller, 2006).
Consumer buying behaviour however is the process by which the individual search for, selects, purchase, use and dispose of goods and services, in satisfaction of their needs and wants. The consumers’ behaviour has a direct effect on the success of the firm and therefore must ensure that they create a marketing mix that satisfies consumers. The consumer mostly goes through about five steps in taking one purchase decision. These include Problem recognition, Information search, Evaluating of alternatives, Purchase decisions, Purchase and Post Purchase evaluation. Actual purchasing is only one stage of the process and not all decision processes lead to a purchase. Also not all consumer decisions will include all the stages but will depend on the degree of complexity and risk involved.
There are however about four types of buying behaviours that consumers exhibit; these include a routine response which needs very little search and used when purchasing frequently purchased item, limited decisions which is used when purchasing low priced brands in a familiar product category, extensive decision which has a high degree of economic, performance and psychological risk which demands lot of time in seeking information and deciding and impulse buying which is spontaneous and needs no conscious planning. This study will conduct a comparative study on the effect of sales promotion on the marketing of GLOBACOM and MTN in Nigeria.
1.2 STATEMENT OF THE PROBLEM
Service providers like the Telecom operators’ needs to provide offerings or services that satisfy consumer needs and expectations to ensure the company’s economic survival. In order to achieve this feat, they need to understand consumer buying behaviour to help them evaluate their service offerings.
Consumers of Telecom service go through a cycle of decision making processes before making a purchase decision which define their behaviour in the consumption of the services they purchase from these companies. The consumer buying process is a complex matter as many internal and external factors impact on the buying decision of the consumer.
The consumer makes a purchase decision by examining alternatives before making the purchase. Sometimes, the purchase may differ from the purchase decision reached earlier.
There is always a post purchase evaluation by the consumers after purchasing and consumption of the service. The consumer determines whether he was satisfied or not with the services rendered. This actually will be an important information reference point to the consumer in determining their behaviour in the next purchase. Because services have experience properties, moods and emotions are critical factors that shape the behavioural process of consumers.
Specific factors that may lead to altered consumer buying behaviour are size and composition of the evoked set of alternatives, perceived risk, brand loyalty and attribution of dissatisfaction as Telecom is in the service industry.
This research therefore seeks to find out to what extent the sales promotion practiced by telecom operators influence the consumer buying process. It also seeks to find out reasons for consumers deviation from the established buying process.
1.3 OBJECTIVES OF THE STUDY
The general objective of this research is to assess the role sales promotion play in influencing the consumer buying behavior of telecom service consumers.
Therefore, this research seeks specifically:
- To find out the practice of sales promotion in the telecom
- To find out the factors that promotes or impairs the effectiveness of the practice.
- To assess the impact of sales promotion on consumer behavior in the telecom
- To recommend suggestions on measures for
1.4 RESEARCH QUESTIONS
This research seeks to find answers to questions such as;
- What are the sales promotions strategies practiced in the telecom industry?
- What are the factors that promote or impair the effectiveness of the practice?
- What impact does sales promotion have on consumer behaviour in the telecom industry?
- What are the suggested measures for improvement of sales promotion?
1.5 SIGNIFICANCE OF THE STUDY
This study would be significant in the promotion of products and services by the telecom operators in Nigeria. This study would also be relevant to companies in the service industry to determine the various factors that influence the consumer’s purchase decisions to enable them adjust their strategies. It will also help the firms to properly utilize their resources, increase their profitability and growth.
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