CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
From time past, businesses all over the world has faced a great difficulty in getting their products acceptable or sold in the market Arens, W.F. (2004). Until recently, producers had always found it difficult to penetrate freely into the market in such a way that prospective buyers are convinced to buy their products and stay loyal to the company’s products. However, the emergence of marketing has paved the way of success for producers and marketers globally.
The genesis of marketing can be traced through the social interaction era, where human beings started interacting with one another and through the interaction created exchange process by exchanging goods for goods known as Barter System Arens, W.F. (2004). With time passing by, stocks of goods started pilling up as demand started to lag behind production. This led to the conscious efforts to push the excess produce through efficient distribution as well as persuasive selling.
Hence, the emphasis was on sales management at the detriment of marketing management, this era is referred to as selling era. With the intensification of selling effort and the emergence of consumer empowerment due to better education and increase in purchasing power, consumers became choosy, refusing to buy products that do not meet their taste irrespective of the amount of personal selling or advertising that backed it up, Oyeniyi O. (2011).
This new behaviour of consumers led to massive product failure since consumers buy products to satisfy their needs and not because the products exist, Oyeniyi O. (2011). This then made companies to identify consumer’s needs before going into production of goods capable of satisfying those needs. This era of marketing is where various market strategies were being employed to win the heart of consumers and maintain their loyalty to a particular company’s product. Producers have now focused on designing various strategies that can be used in conquering a heavily competitive market in order to have the market leadership. Hence, various marketing strategies have been used over the years (Robert, 2012).
In Nigeria, the mobile industry is highly competitive and telecom operators attempt to appeal and win customers through various sales promotion strategies. The Nigerian mobile industry is entering its maturity phase, with reducing average profit. With fierce competitive telecom operators must work hard to reduce cost, win new customers and retain existing ones and increase profit to ensure sustainable development of their businesses. There are four major telecommunication providers in Nigeria (MTN, GLO, AIRTEL and ETISALAT) offering Global Systems of Mobile (GSM) services with several mobile fixed wireless companies (Multi-links, Starcomms, Visafone, Zoom-mobile etc) Code Division Multiple Access (CDMA). Nigeria telecommunication industry is one of the largest in Africa with over seventy (70) million GSM users and still growing with one of the highest fixed line revenue and cumulative revenue of US$14billion as at December, 2009 (NCC, 2010).
The Nigerian mobile industry in the past few years has witnessed stiff competition which has resulted in aggressive use of various market strategies employed by telecommunication market players to strengthen their brands by appealing to the good conscience of stakeholders Oyeniyi O. (2011). For the forward looking ones, the consistent and divergent use of these strategies has proved effective in improving their corporate image and turnover. Dominant players like MTN, GLO, ETISALAT, AIRTEL among others have been visible in the past committing substantial amount of money to the employment of various laudable marketing strategies. Others have even redefined their various promotions in order to reach the less privileged and rural members of the society who are much more in population (National Census, 2006). It is hoped that issues raised in this study will stimulate interest not only among marketers, researchers and student but also among policy makers and planners in industry and government.
This study sought to investigate marketing strategies employed by telecommunication marketers as it can be compared with its effect on market dynamism. It also intends to determine the relationship that exists between marketing strategies adopted by telecommunication firms and the huge sales recorded annually by operators in the Nigerian telecommunication industry using Globacom Limited as a case study focusing on the relative performance, the importance and success of the chosen case study which was used to draw generalization on the Nigerian
telecommunication market.
1.2 SCOPE OF THE STUDY
This study would attempt to explain the mass media, brand loyalty and promotional strategies in the mobile industry in Nigeria.
1.3 STATEMENT OF PROBLEM
Advances in technology (especially information technology) and globalization have changed the way in which the world conducts business and are increasingly providing consumers with greater conveniences. The Industrial Revolution of the 18th century led to a new economy, which was defined in terms of mass production of standardized products, mass distribution of these products to consumers and mass media vehicles to carry standardized advertising messages.
1.4 OBJECTIVES OF THE STUDY
The study is aimed at examining the extent to which consumers can be influenced by the use of promotional strategies in the mobile industry in Nigeria.
It is a known fact that advertising is money generating sector to any functional media house; It helps to sustain the media houses. Everyday advertisement takes a new lift. It develops with time. Firms and corporation non makes use of their product commercial to sponsor both local and network programmes. This is done in order for their products and services to get recognition which will in turn help to promote business and sales. As a result of this, advertisers embark on different strategies to achieve effective advertising promotions.
1.5 SIGNIFICANCE OF THE STUDY
The significance of this study therefore is to know if promotional strategies in the mobile industry in Nigeria has any impact on the consumer either in a positive of negative way. This is important because it will create and ideal scene for a healthy competition on the effectiveness of their adverts. It will also help advertising agencies and professional advertisers in planning their advert campaigns.
1.6 RESEARCH QUESTION
This research will be used to investigate the following question that are likely to arise because of the use of promotional strategies in the mobile industry in Nigeria and the effect they have on consumers buying behaviour:
1. Do consumers remember advertised product that featured a promotional strategies more than that without a promotional strategies?
2. Does promotional strategies use have any impact on consumer’s buying pattern?
3. Does the use of promotional strategies increase the credibility of the products?
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