IMPACT OF SALES PROMOTION ON SALES PERFORMANCE (A CASE STUDY OF MTN)
ABSTRACT
Sales promotion can be an effective tool in a highly competitive market environment, when the objective is to convince retailers to carry new product or influence consumers to select it over those of competitors. Sales promotion is one of the major elements of promotion and is perceived to be the most widely and intensively employed tool in the telecommunication industry of Nigeria. This study was conducted to ascertain the Impact of sales promotion and advertising on sales performance (A case study of MTN). Three research questions and objectives were posited for the study.A descriptive survey research design was adopted. The study used purposive and stratified random sampling techniques for selection of respondents with questionnaire as the research instrument. The results of the study indicated there is a positive relationship between sales promotion and tertiary subscribers choice of telecom network. The study found that sustained sales promotions can retain customers and also that free or reduced charge to same network is the most the most favored strategy by subscribers The study recommends telecom firms should broaden the scope of their promotions by allowing customers to use incentives across networks. Future researchers should also consider “the effectiveness of sales promotion on brand loyalty
CHAPTER ONE
INTRODUCTION
1.1 Background to the study
According to Kotler (2003), Sales Promotion is a key ingredient in marketing campaigns and consists of a diverse collection of incentive tools, mostly short term designed to stimulate quicker or greater purchase of particular products or services by consumers. Sales promotions programs are those activities other than stimulate consumer purchase.
Competition within telecommunication industry is getting tougher day by day due to globalization, deregulation, increasing global and domestic competition, new technologies, and e-commerce (Daniel & Mambu Bayoh, 2017). The firms are competing to each other for customers, market share and long-term survival. Customers are becoming more cultured, segmented and demanding, and anticipate more in terms of customization, newness, quality and price (Stark, 2011). In order to survive in current conditions of market, firms within the industry must enhance their innovation capabilities in order to satisfy market demands and customer preferences to maintain a long-term competitive advantage (Panayides, 2006). In Sub-Saharan African countries, for which Nigeria is not an exception, the continuous growth in technology, coupled with the proliferation of mobiles phones especially in the telecommunication industry have pushed many mobile network operators to build robust innovative service and products in order to gain consumer satisfaction. (Aker & Mbiti, 2010). Sales promotion packages has been one of the present-day competitive approach in retaining and wining prospective subscribers in Nigeria telecommunication market.
In Nigeria telecommunication sector, the promotion offers arrays from minutes, days, weekly, monthly, bi-annually and yearly subscription basis. It however includes; local and international voice calls, data bundles, cash prizes and many other materials rewards. Sales promotion has full-fledged substantially in recent years within the global and local telecommunication industries for the apparent fact that companies feel sales promotion is inducement and plays an important role in the consumer decision making process (Daniel & Mambu Bayoh, 2017).
Nigeria ’s mobile telecommunication industry is noted to be one of the fastest growing sectors of the Nigeria economy and there is fierce competition within this sector made up of five telecom operators namely, MTN, Glo, Airtel, Etisalat There are several reasons for this dramatic growth in sales promotion. First, consumers have accepted sales promotion as part of their buying decision criteria. It provides reluctant decision makers with an incentive to make choices by increasing the value offered by a particular brand. Second, the increasing tendency of businesses to focus on short-term results has helped spur growth in sales promotion, which can provide an immediate boost in sales. Product managers also tend to view sales promotion as a way to differentiate their brand from that of competitors in the short term. Third, the emergence of computer technology has enabled manufacturers to get rapid feedback on the results of promotions. (Benjamin & Gideon, 2018).
MTN Nigeria have over the past few years employ a lot of creative sales promotional offers with the main intention of increasing customer base and retaining existing customers. The researcher chose MTN because they it is among the first giants rival in Nigeria Telecommunication industry.
1.2 Statement of the Problem
Strong competition among the telecommunication networks in Nigeria has led to the application of various marketing strategies and tactics to win a good share of the market. Sales promotion has been extensively used by these networks in their attempt to outsmart their competitors. Meanwhile Sales Promotion which is a key ingredient in marketing campaigns and consists of a diverse collection of incentive tools is mostly short term designed to stimulate quicker or greater purchase of particular products or services by consumers but seen as lacking the capacity to retain customers. However, little research has been done in this area to underwrite to knowledge. This stimulated the researcher to survey the Impact of sales promotion and advertising on sales performance (A case study of MTN).
1.3 Objective of the study
To ascertain the relationship between sales promotion and consumer buying decision in MTN Nigeria.
To determine which of the consumer promotional strategies is the most effective for MTN Nigeria
To examine the perceived impact of sales promotion on the profitability of MTN Nigeria
1.4 Research Question
In order to successfully achieve the objectives, the research seeks to find out answers to the following questions;
What are the relationship between sales promotion and consumer buying decision in MTN Nigeria.
Which of the consumer promotional strategies is the most effective for MTN Nigeria?
What are the perceived impact of sales promotion on the profitability of MTN Nigeria?
1.5 Scope of the study
The scope is limited to the Impact of sales promotion and advertising on sales performance . The researcher chooses MTN as the case study. The respondents are majorly MTN suscribers.
1.6 Significance of the study
The study will be of great importance to me as a researcher because it will enrich me with knowledge and skills of doing research. The study will be a source of literature to other scholars who will be researching on a related topic. The research will benefit the company by helping it to understand how promotional activities can aid it in improving sales and how it can have a positive impact on their brand and their company as a whole through increasing sales revenue. The study will benefit the general public by helping them understand the sale promotional tools being used by MTN to increase its sale revenue
1.7 Limitations of the Study
Financial Constraints: The researcher was with limited funds and cannot visit all the areas to get responses from respondents but was able to get good information concerning the research topic.
Time Constraints: The researcher was involved in other departmental activities like seminars, attendance of lectures et.c which limited the time for the research but the researcher was able to meet up with the time assigned for the completion of the research work.
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